A Framework for Advancing Responsible Mineral Development
Responsible Mineral
Development Initiative
2011
In collaboration with The Boston Consulting Group
Contents
1
Foreword
2
Executive Summary
3
Chapter 1: The Context
4
Chapter 2: The Challenges
5
Chapter 3: Six Building Blocks for
Responsible Mineral Development
6
Building Block 1: Progressive
Capacity Building and Knowledge
Sharing Among All Stakeholders
10 Building Block 2: A Shared
Understanding of the Costs and
Benefits, Risks and Responsibilities
Related to Mineral Development
Foreword
As demand for mineral resources grows ever stronger, and the resource
frontier extends further into less developed regions, a responsible,
sustainable approach to mineral development has never been more
necessary.
It is our great pleasure to introduce this second milestone report as part
of the World Economic Forum’s Responsible Mineral Development
Initiative (RMDI) launched in 2010. In building on the work carried out in
2010 that identified the key challenges facing responsible mineral
development, the RMDI continues to provide a neutral, truly
multistakeholder platform for the discussion and development of ideas
capable of unlocking the potential socio-economic benefits of mining.
Robert Greenhill
Managing Director
and Chief Business
Officer
12 Building Block 3: Collaborative
Processes for Stakeholder
Engagement throughout the Life
Cycle of Mining Projects
The creation of this report involved extensive outreach and dialogue with
members of the private sector, governments, academic community,
NGOs and multilateral organizations from around the world. We are
extremely grateful to the many stakeholders whose invaluable input and
support for this global initiative made this report possible.
16 Building Block 4: Transparent
Processes and Arrangements
In particular we thank:
19 Building Block 5: Thorough
Compliance, Monitoring and
Enforcement of Commitments
21 Building Block 6: Early and
Comprehensive Dispute
Management
23 Stakeholder Views of the Value of
Highlighted Actions
During 2011, the RMDI has held workshops spanning all six continents,
with the aim of providing a framework with practical solutions to the
challenges of responsible mineral development. The result is brought
together in this report. It lays out six building blocks that we believe will
act as a constructive framework for the next step towards a more
responsible, sustainable future for mineral development.
•
The RMDI Advisory Group: Clive A. Armstrong (World Bank Group),
Beatriz Boza Dibos (Ciudadanos al Día), Stephen D’Esposito
(RESOLVE), R. Anthony Hodge (International Council on Mining and
Metals), Antonio A.M. Pedro (United Nations Economic
Commission for Africa), Puntsag Tsagaan (Office of the President of
Mongolia), David Williams (TechnoServe).
•
Our Industry Partners from the Forum’s Mining & Metals Industry,
and in particular the CEOs who served on the Mining & Metals
Steering Board in 2011: Richard O’Brien, also member of the RMDI
Advisory Group, Tom Albanese, Cynthia Carroll, Patrice Motsepe,
Klaus Kleinfeld and Ivan Glasenberg.
•
The Members of the World Economic Forum Global Agenda
Council on the Future of Mining & Metals: Anthony Andrews, Joyce
Rosalind Aryee, Jorge Bande, Britt D. Banks, Marketa D. Evans,
Charmian Gooch, Huguette Labelle, Anna Littleboy, Kathryn
McPhail, Maria Ligia Noronha, Paulo Camillo Penna, William
Scotting, Shen Lei, Michael H. Solomon and Liliang Teng.
Alex Wong
Senior Director, Head
of Centre for Business
Engagement
26 Chapter 4: The Use of Mineral
Development Agreements
27 Chapter 5: Considerations Going Forward
28 Appendix
28 A) Country Segmentation: Taking a
Differentiated Look at Mining
Countries
31 B) Overview of Stakeholder
Consultations
32 C) Acknowledgements
38 D) Project Team
39 E) Acronyms, Overview of Exhibits
and Sources
We especially thank and recognize Jan Klawitter, Head of the Forum’s
Mining & Metals Industry team until end 2011 and Britt D. Banks, Adjunct
Professor at the University of Colorado and Vice-Chair of the Global
Agenda Council on the Future of Mining & Metals, for their overall
leadership of the RMDI in 2011. We are also most grateful to The Boston
Consulting Group as our knowledge partner for this year’s work and, in
particular, to Till Schmid for his dedication and commitment as project
manager.
Executive Summary
The development of mineral resources is a key driver of global economic
growth. It has the potential to transform economies and societies,
including some of the world’s poorest nations, but the extent to which it
has fulfilled that potential is varied.
The Responsible Mineral Development Initiative (RMDI) explores the
views, priorities and concerns of key stakeholders in mineral
development. It asks where discontent and frustration most commonly
arise, where improvements can occur, and what can be done to foster a
more responsible, sustainable mineral development, thus enabling
better integration of mining wealth into national economies.
This report highlights and discusses specific actions for each building
block. Related case studies and ongoing initiatives show their practical
application. Examples include: Alcoa has set up a local development
council in Brazil, Rio Tinto publishes its tax and royalty payments for 28
countries, and Mongolia has created a national dialogue platform.
Exhibit 1: The Responsible Mineral Development Initiative in two phases
Phase I (2010)
Identify challenges
Main obstacles to responsible
mineral development
While the first phase of the Initiative focused on identifying the
challenges around responsible mineral development, this second phase
report summarizes stakeholder views on how to address these
challenges.
Stakeholders were clear that there is no single “silver bullet” solution to
all problems. Instead, several themes and dimensions need to be
addressed in parallel and in relation to their possible applications. A
framework of six building blocks was identified to address recognized
challenges and provide guidance for next steps:
(1) Progressive capacity building and knowledge sharing among all
stakeholders
(2) A shared understanding of the benefits, costs, risks and
responsibilities related to mineral development
(3) Collaborative processes for stakeholder engagement throughout
the life cycle of mining projects
(4) Transparent processes and arrangements
(5) Thorough Compliance, Monitoring and Enforcement of
Commitments
Phase II (2011)
Provide possible solutions
Six building blocks to address
challenges
Practical actions for
implementation
Reference to case studies and
initiatives
A global survey1 shows a majority belief across all countries and
categories of stakeholders that the actions advocated in this report are
“very” or “extremely” helpful in the development of responsible and
sustainable mining. In particular the importance of building training and
development programmes, conducting collaborative socio-economic
studies and establishing effective dialogue platforms, were highlighted.
This report summarizes the wealth of information and ideas we received.
It acknowledges the complexity of the sector, and the huge variety of
countries and cultures involved. It does not attempt to define a “recipe”
or provide all-encompassing solutions. Instead, we hope it can add
valuable insight and guidance to support the considerable body of
existing work in this field.
(6) Early and comprehensive dispute management
Survey conducted in November 2011 involving 145 representatives from mining companies, public
sector, NGOs, academia and civil society from 33 countries.
1
2
Responsible Mineral Development Initiative 2011
Chapter 1: The Context
Some of the world’s poorest countries are rich in mineral resources.
Using these resources effectively offers an unmatched opportunity for
social and economic transformation.
The RMDI seeks to facilitate ways to help mineral-rich countries attain
socio-economic progress beyond the mining revenues, stimulating
broader indirect benefits.
Mineral development can help drive socio-economic development in
ways that fit with local and national priorities. In particular, it can
contribute to the country’s development by generating foreign direct
investment, export earnings, government revenues (through royalties,
taxes, licenses and fees), GDP growth and employment.
The complexity of the industry, and wide variations in political,
economic, regulatory, physical and cultural environments, mean that no
solution is universally applicable. As a result, this report does not seek a
“recipe” or all-encompassing solutions. We recognize that while much
remains to be done, excellent contributions to responsible development
already exist. Our aim is to build on this work. Initially focused on the
roles and use of Mineral Development Agreements (MDAs), our work
broadened in scope, while at the same time considering how to improve
MDAs.
Achieving responsible, sustainable development is tough and
complicated. Progress is being made along many fronts in many
regions, but there are significant barriers to progress. These barriers are
often highest in countries where sustainable development is most
needed.
The World Economic Forum launched the Responsible Mineral
Development Initiative (RMDI) in 2010. It started by asking a global range
of stakeholders to identify the key challenges around responsible
mineral development. It asked what works, what does not, where
discontent and frustration most commonly arise, and where
improvements can occur. The report from Phase I outlined what the
stakeholders see as the sector’s common concerns and challenges.
The concept of an RMDI “stakeholder” is used frequently throughout this
work. This encompasses mining companies or their representatives
(both national and international), governments (national, regional and
local), NGOs, representatives of local communities, indigenous peoples,
civil society, international bodies and multilateral development
organizations3, academic institutions and individuals with interests in
mining and its impacts. A multistakeholder consultation or platform
includes a broad range of these groups.
In its second phase, throughout 2011, the RMDI sought both a deeper
understanding of these challenges and constructive, practical
responses to them. Further research and consultation was underpinned
by workshops across six continents [Exhibit 2]. We asked how mineral
development can occur in a way that best considers the full social and
economic contributions and costs across the entire life cycle of a mine
from the onset of exploration through closure and reclamation, while
also fairly addressing the distribution of costs, benefits, risks and
responsibilities between stakeholders. This report summarizes the
answers received.
Exhibit 2: RMDI stakeholder engagement (phases I and II)
Stakeholders from companies, government and civil society consulted around the world
– meetings, workshops and country-specific interview research2
Phase I 2010
Phase II 2011
See Appendix for further details.
2
3
For example, the United Nations, World Bank Group and regional development banks.
Responsible Mineral Development Initiative 2011
3
Chapter 2: The Challenges
What are the main obstacles to responsible mineral development?
Mining is an expensive, long-term business that has a profound effect on
its host societies. Stability and trust are essential underpinnings of any
development. Companies making heavy, long-term capital
commitments must be sure that they are in a stable legal, political, social
and economic environment. Stakeholders in those societies need to
have confidence that the economic and social benefits from mining will
be distributed equitably, with respect for their culture, their environment
and their future economic stability.
Our stakeholder consultation found the following obstacles to
responsible mineral development:
Key obstacles...
Limited expertise and •
institutional capacity of
government, civil
•
society, and
companies
•
Consultations with 250 stakeholders in 13 countries during RMDI Phase
I highlighted a broad range of concerns that undermine trust and
confidence. An understanding of these concerns was further developed
through continued consultation during Phase II. The variety of concerns
matched the range of country and company situations, meaning that no
two problems identified were entirely equivalent. However, common
themes emerged.
Mining companies have found that in some countries the risks of
investment can outweigh any potential benefits. Investment is vulnerable
if there are unexpected changes to the law that undermine the original
terms of agreement, since these terms underpin its economic viability
and make investment possible in the first place. So, companies feel
threatened by rising resource nationalism and its associated possibility
of unexpected dramatic change.
These possibilities will form part of the comprehensive risk analysis that
precedes any investment. This will also take in the stability and length of
the approvals process, the potential for resistance in the host country,
which in extreme cases may extend to issues of human security, and the
adequacy of local, regional and national infrastructure.
Governments may suspect that they are not receiving an appropriate
share of benefits from a project. Sometimes this is because agreements
made under previous administrations were marred by corruption or an
imbalance in negotiating capacity. Civil society can feel that
communities are suffering damage to their health and environment while
missing out on social and economic benefits. All of this may be
compounded by poor communication and a lack of transparency,
leading to misunderstanding and distrust.
4
Responsible Mineral Development Initiative 2011
... and associated observations
•
•
•
Inadequate inclusion
of stakeholders in
decision processes
•
•
•
Opaque negotiation
and development
processes, scarce
information shared
•
•
•
Incomplete
•
compliance,
monitoring and dispute •
resolution components
Lack of common understanding of the nature,
scope and timing of the benefits and costs to be
derived from mineral development
Weak formulation of mining policy and regulations,
ineffective bureaucracy, poor monitoring and
enforcement
Civil society struggling to engage constructively in
process and with diverse, often unrealistic,
expectations
Companies with insufficient understanding of host
country and local community priorities, concerns
and ambitions
Roles and responsibilities remain unclear
Lengthy and complex negotiation processes, and
perceptions of deceit
Distrust among stakeholders and constraints for
constructive participation
Suboptimal programmes for development for
infrastructure, employment and local supply
chains
Difficulties in building social acceptance for
mineral development
Distrust among stakeholders
Missed opportunities for proactive engagement
Unclear accountability
Benefits lost through schemes left unfinished and
commitments not honoured
Escalation of disputes or cultivated resentment
These obstacles are the common challenges in the view of the
consulted stakeholders. The question is, how to address them?
Chapter 3: Six Building Blocks for
Responsible Mineral Development
Consultations made it clear that there is no “one-size-fits-all” solution to
the multifarious challenges of responsible development. Given the size,
length and complexity of most mining developments, their multiple
impacts on their host societies and the immense differences within and
between those societies, every development is different as are the
measures and devices necessary for its sustainable success.
Instead, stakeholders suggested that solutions must be developed
along parallel dimensions. A framework of six building blocks was
identified to address recognized challenges and provide guidance for
next steps. The importance of each depends on its context.
(1) Progressive capacity building and knowledge sharing among all
stakeholders
(2) A shared understanding of the benefits, costs, risks and
responsibilities related to mineral development
(3) Collaborative processes for stakeholder engagement throughout
the life cycle of mining projects
(4) Transparent processes and arrangements
(5) Thorough Compliance, Monitoring and Enforcement of
Commitments
(6) Early and comprehensive dispute management
The six building blocks reflect the issues surrounding many
developments. They include economic and social aspects, such as
issues around taxes and royalties, local suppliers and hiring,
environmental questions such as water, waste and land use, as well as
health and safety concerns.
Developing programmes and actions based on these building blocks
should help provide the stability sought by mining companies and foster
the trust demanded by all stakeholders. The building blocks apply
throughout the life cycle of the project, supporting all parties through
exploration, negotiation, feasibility, development, operation and
monitoring through to enforcement, closure and legacy. Finally, they
should ensure that while the potential for conflict is minimized, the
means for resolving disputes still exists.
Stakeholders raised many worries concerning process. Their needs and
priorities related to the “how” rather than the “what”. They seek practical
actions that underpin tailored solutions for each project.
This report highlights a selection of possible actions, case studies and
initiatives that emerged from our stakeholder consultation. The case
studies show how suggested actions have been put into practice. The
initiatives offer existing programmes or toolsets to which stakeholders
can look for additional advice or help with implementation [Exhibit 3].
These are not presented as universal solutions, but as practical
examples that have helped to advance responsible mineral development
in specific circumstances. We acknowledge that there are many other
possible actions, case studies and initiatives besides, and each needs to
be seen in the context of its application.
Each of the six building blocks – and their corresponding actions,
supporting case studies and initiatives – is discussed and explained in
sections 3.1 thru 3.6. [Exhibit 3]
The results of a global survey designed to uncover stakeholder views of
the eight highlighted actions in this report, in particular, how effective
they believe each action can be in different country contexts, is
discussed in section 3.7.
Exhibit 3: Overview of the RMDI framework formed out of six building blocks, highlighted actions, referenced case studies and initiatives
Use and contribute to a global repository of
good practice guidance
The World Bank EI Source Book
Prepare effective dispute resolution
mechanisms
Harvard Kennedy School CSR grievance
mechanism guidance
Anglo American establishing company-wide
guidance and tracking system
Government establishing office of the extractive
sector CSR Counsellor, Canada
(1) Progressive
capacity building
and knowledge
sharing
(6) Early and
comprehensive
dispute
management
Develop commonly agreed compliance
monitoring and enforcement mechanisms
World Bank Institute contract monitoring
initiative
World Bank Institute convening contract
monitoring coalition, Ghana
(5) Thorough
compliance
monitoring and
enforcement of
commitments
Publish relevant agreements, tax and royalty
payments
EITI, a global transparency standard
The Access Initiative
Liberia publishing mining agreements
Rio Tinto Group publishing tax and royalty
payments
Highlighted Action
Case Study
Six Building
Blocks for
Responsible
Mineral
Development
(4) Transparent
processes and
arrangements
(2) A shared
understanding of
the costs and
benefits
(3) Collaborative
processes for
stakeholder
engagement
Create tailored training and development
programmes
African Mining Vision
Australia’s Mining for Development Initiative
IFC training for municipal government, Peru
The Royal Bafokeng Nation training community
leaders
BHP Billiton and Codelco developing local
suppliers, Chile
Conduct rigorous and collaborative socioeconomic studies
ICMM’s Mining Partnerships for Development
Toolkit
Application of ICMM toolkit, Laos
Newmont conducting economic impact study,
Ghana
Establish national dialogue platforms
The Devonshire Initiative
Establishing a national dialogue platform,
Mongolia
Set up local development councils
Alcoa setting up local development council, Juruti,
Brazil
Cree Nation and Goldorp cooperation, Quebec
Initiative
Responsible Mineral Development Initiative 2011
5
Building Block 1: Progressive Capacity Building and
Knowledge Sharing Among All Stakeholders
One of the strongest messages from consultation was that the lack of
capacity across stakeholder groups could create inefficiencies and
distrust from the start of the development process. The stability
provided by effective capacity building and knowledge sharing is
essential for responsible mineral development.
Capacity must be sustainable in the long term. Stakeholders need to be
capable of managing the whole life cycle of the project. Despite much
current good practice, there are concerns about the effective tracking
and communication of lessons, and their practical application on the
ground.
This deficiency points to several connected needs. One is for
coordinated sources of knowledge and expertise – where can
governments, NGOs and companies quickly and easily find information
on good practice? Another is capacity building – giving government and
company staff, institutions and civil society the ability to operate in the
environment created by mineral projects. In particular, there is a critical
need to address gaps in government capacity to manage natural
resources effectively. Companies and civil society organizations also
have capacity limitations, which may hold them back from taking further
steps towards responsible development and can be addressed by
better information flows and best practice sharing
Stakeholders suggested practical steps that include building affordable,
high-quality training and research facilities for the extractive industries,
as well as training companies how to enhance and grow their ongoing
efforts to advance regional development. Local employability can be
improved by offering basic literacy and numeracy education and
mining-specific training. Other participants, such as businesses within
the local mining supply chain and regulatory bodies, may lack capacity,
and stand to benefit from training. Programmes should be developed
with reference to the concerns and ambitions of host regions and their
historic and cultural contexts.
Both the creation of a global repository of good practice guidance, and
the establishment or enhancement of training and development
programmes are examined in greater detail below.
Highlighted Action: Use and contribute to a
global repository of good practice guidance
There is no shortage of ideas and initiatives on good practice. The
challenge is to keep track, understand each example’s context and
synthesize the best lessons. This becomes much easier if there is a
single place where all information is collected, classified and made
available in a user-friendly, easy-to-understand format.
Why this is helpful
A global repository could facilitate the dissemination of good practice
advice and information to stakeholder and interest groups. It would
assist the global exchange and collaboration needed to promote and
enable research and dialogue on the most significant and contentious
issues facing the sector.
Access would enable all stakeholders to learn from the parallel
experiences and good practice of others. It would reduce asymmetry in
negotiations, creating greater trust between parties and more stable
projects. Investment decisions could be better informed, and faster,
more effective action taken on broader socio-economic development.
6
Responsible Mineral Development Initiative 2011
There are many existing initiatives working towards these aims.
However, greater value would be generated by a truly global resource
acting as a central hub for these separate sources of information.
Global initiatives include the Natural Resource Charter and The World
Bank Extractive Industries Source Book. The Natural Resource Charter
summarizes the choices and suggested strategies that governments
might pursue to advance sustained economic development from natural
resource exploitation into a set of 12 economic principles. The World
Bank Extractive Industries Source Book is currently working to create a
comprehensive global collection of good practice examples [Initiative 1].
How to overcome potential barriers
Barriers to implementation include the need for a central body or
platform to collate information and ensure free access, and the debate
inherent in establishing what is good practice. Companies may be wary
of opening up material that they feel gives them a competitive
advantage, while governments may be handicapped by the limited
capacity that this action is intended to help remedy.
Identifying good practice and experience can be most effective if the
repository is hosted by an international, well-resourced body capable of
maintaining both the collection and the quality of material. Ensuring the
independence of the repository, particularly in relation to findings, is
essential. This can be achieved by funding via an independent
consortium, as seen in the World Bank initiative [Initiative 1].
Best experience and practice can most effectively be established
through a rolling programme of advisory groups, workshops and
stakeholder consultation. Its activities can be publicized, and
participation driven though international organizations, industry bodies
and specific country-directed initiatives.
Looking forward
Companies can do most to assist, and gain the greatest benefits
themselves, by proactively considering what good practice information
can be shared and how best to do it. It should offer an excellent
opportunity to both showcase corporate social responsibility (CSR)
activities and learn from other companies.
Governments can help by explaining which areas of practice are in most
need of information and would be most useful. Governments could
consider using guidance and good practice to introduce well
considered, principle-based regulations for areas such as risk
assessment and due diligence.
NGOs can use their networks to actively engage governments and
companies. They can play key roles in comparing critical issues in
different regions, and contributing to or orchestrating the development
of materials that share good practice. They can also help turn this
knowledge into action on the ground and develop practical initiatives
with other stakeholders. Close local connections can help them develop
a collective voice for communities.
Building Block 1: Progressive Capacity Building and Knowledge Sharing Among All Stakeholders
Initiative 1: The World Bank Extractive
Industries Source Book
Active in mining issues for more than 60 years, the World Bank Group
began a review of its engagement in the extractive industries in 2001
(known as the Extractive Industries Review), to consider its role in the
sector and to identify and promote good practices. In the decade since,
emphasis has shifted towards sustainability – supporting key initiatives
such as the Extractive Industries Transparency Initiative.
The Source Book was launched in 2011 as a resource for stakeholders
seeking to develop good practice. It aims particularly at rapid capacity
building and diverse, open-sourced collaboration.
It will collect good practice guidance both from external partners and
within the World Bank group – many of whose publications focus on the
regulatory/good governance agenda; and work in partnership with the
International Council on Mining and Metals (ICMM), the World Economic
Forum and NGOs, such as Revenue Watch and Publish What You Pay.
Initial concentration is on five “hot spot issues” seen as essential to
sustainable development
•
Collecting geoscience data
•
Resource corridors
•
Barriers to diversification
•
Using extractive industries to drive infrastructure development
•
Transparency and government norms
The independence of the Source Book is enabled through its funding by
The Development Grant Facility (DGF), a trust managed by the World
Bank. Funding is provided to the University of Dundee, which leads a
consortium of policy centres in providing an independent resource and
ensuring a wide range of viewpoints. The University of Dundee also
leads the assessment process on what qualifies as good practice
examples.
Highlighted Action: Create tailored training
and development programmes
Lack of expertise is a widely discussed and deep-rooted problem.
Training and development programmes, tailored to the specific needs of
the participants, could particularly benefit governments, which may be
going into mining negotiations for the first time and must then take on
the demands of developing and managing resources and revenues
effectively. Such programmes could also benefit local populations,
which stand to gain relevant skills and employment. Companies could
be assisted to engage effectively with national governments and local
communities, gaining an improved understanding of the cultural context,
current situation and worldview of those they will be working alongside.
Why this is helpful
Benefits would be realized across the board. Those for national
governments, including enhanced ability to negotiate with experienced
mining companies and managing the subsequent development process
better, are more obvious. Companies would also be better off.
Contracts negotiated robustly on both sides are likelier to be durable,
with less risk of calls for destabilizing renegotiations at a later stage. A
better understanding of the industrial and investment side of the mining
process would help governments assess the impact of potential policy
changes on companies, particularly in relation to capital intensity and
time scales. Companies that fully understand the cultural, social and
economic background of communities have a much more solid base for
long-term engagement and acceptance.
Civil society would see resources better managed by governments and
institutions, with skills and expertise enhanced across many bodies.
Individuals could gain economic independence and transferable skills
through education and professional qualifications. Programmes to build
the capacity of the local supply chain, as seen in Chile [Case Study 3],
improve not only the regional economy, but also the operational
efficiency and technological capacity of the mining operation.
Overcoming potential barriers
Finding sources of funding could be the main problem, while
divergences among the training curricula of different countries and
regions are sometimes obstacles to common understanding.
There are several ways around this. Funding sources like the World
Bank’s Technical Assistance Loans can be used, while regional
development banks, such as the Inter-American Development Bank, are
also showing serious enthusiasm for this action. Mining companies
could be encouraged to provide scholarships for industry-related
courses, or invest in training centres. Once mining revenues begin to
accrue, effective reinvestment in both government and civil society
training is vital to ensure sustainability. The Royal Bafokeng Nation
invests heavily in tertiary education and training to build skills and
confidence among its traditional community leaders, and to empower
individuals to enhance economic self-sufficiency beyond mining [Case
Study 2].
At a regional level, existing initiatives such as the New Partnership for
Africa’s Development (NEPAD) Centres for Excellence [Initiative 2] can be
leveraged. Regional economic communities can assist by ensuring that
mining courses have a common curriculum, offering comparable
qualifications across their regions. Courses would be aimed in particular
at public officials at national, municipal and local levels, providing
knowledge of basic subjects such as contract negotiation and revenue
management.
Responsible Mineral Development Initiative 2011
7
Building Block 1: Progressive Capacity Building and Knowledge Sharing Among All Stakeholders
Existing education centres and universities could be used. This would
reduce costs by building capacity within establishments that already
have infrastructure, staff and experience of applying for funding.
Looking further afield, international organizations like the International
Finance Corporation (IFC) can provide additional training and advisory
services [Case Study 1]. Developed countries such as Australia [Initiative
3] and Canada, through its International Institute for Extractive Studies
and Development, are looking at how to best use their expertise to help
other mining countries.
Looking forward
Companies and governments will enjoy greater medium- and long-term
project stability if they invest in capacity building at the country and
community levels. NGOs have the opportunity to encourage and take
advantage of international and regional collaboration. Other highly
developed mining countries could follow initiatives taken by Australia
and Canada in setting up projects to transfer expertise to emerging
economies [Initiative 3] or support regional resource centres such
Africa’s Mineral Policy Centre [Initiative 2].
As local communities and national populations gain skills, companies
will be in a better position to employ their citizens in all aspects of the
mining process. With the right training, companies can engage more
effectively with communities, avoiding disputes and advancing
responsible mineral development.
Stakeholders wanted greater awareness of the work currently carried
out by multilateral organizations in this area. In this report we mention
examples such as the Africa Mining Vision [Initiative 2] and the
International Finance Corporation training programme [Case Study 1].
More exchanges between these organizations, possibly via an existing
national-level dialogue platform or a global repository of good practice,
would help each learn from the others’ experiences. They could also
benefit from better coordination, pooling of resources and engaging
organizations not yet involved.
Initiative 2: Africa Mining Vision
Adopted at the African Union summit in 2009, the Africa Mining Vision
advocates “transparent, equitable and optimal exploitation of mineral
resources to underpin broad-based sustainable growth and socioeconomic development”. It aims to integrate mining in Africa into broader
development, increasing added value, linkages to local economies, local
content and empowerment, and prudent use of revenues. The Vision
includes a preliminary framework for action, identifying roles and
responsibilities for key players. It is a collective tool for governments,
organizations and civil society in Africa to help move forward within their
own countries, while working collaboratively across the continent.
Initial capacity-building priorities already identified include educational
reforms, the standardization of mining qualifications, governmental
promotion of new technology innovation hubs, and the expansion and
extension of the training centre network. The New Partnership for
Africa’s Development (NEPAD) centres of excellence programme will be
promoted, and universities and colleges encouraged to link with other
regional and national institutions.
An Action Plan is currently being developed to guide the implementation
of the African Mining Vision. It includes the establishment of a Mineral
Policy Research Centre, which would coordinate the different ongoing
activities, including providing technical support, identifying gaps and
areas of need in member states, and developing policy strategies and
options.
Initiative 3: Australia’s Mining for
Development Initiative
Australia, with its mature mineral economy, announced its Mining for
Development Initiative in October 2011. It is intended to aid economic
growth and social benefit in developing countries by improving resource
governance, sustainability and development.
Together with the Australian Agency for International Development
(AusAID), it will draw on industry and development expertise from
academic institutions, government and NGOs. Its activities will include
offering scholarships, capacity building, promoting transparency,
developing skills through partnership, engaging with communities and
the creation of an International Mining for Development Centre.
Through this centre Australia plans to provide AU$ 31 million for practical
advisory, education and training services to developing countries, and
expects to include 1,870 training places in Australia and in developing
countries and 24 research fellowships.
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Responsible Mineral Development Initiative 2011
Building Block 1: Progressive Capacity Building and Knowledge Sharing Among All Stakeholders
Case Study 1: International Finance
Corporation training programme, Peru
Case Study 3: BHP Billiton and Codelco
developing local suppliers, Chile
The IFC, a member of the World Bank Group, focuses on providing
finance and advisory services to the private sector in developing
countries.
BHP Billiton and the Chilean state-owned mining company, Codelco,
have adopted the Cluster-Programme for the Development of WorldClass Suppliers to enhance engagement with local businesses. At the
same time as increasing their own competitiveness, they aim to increase
the capacity of domestic suppliers and contribute to national long-term
growth and development. Between them they currently back 51 cluster
projects.
The local government in Baños del Inca, Peru, received significant tax
revenues from a successful nearby gold mine, but lacked the experience
needed to invest it successfully to benefit local communities.
Training key staff through workshops and one-on-one coaching first
developed capacity. An investment tracking system, which promotes
accountability, and an on-demand, Web-based specialized advice
service, were set up. In addition, work with local institutions focused on
promoting accountability by disseminating information on tax revenues
and tracking local government investments.
Municipal investment quadrupled by 2009, with most devoted to rural
areas and basic needs such as water systems and infrastructure. Efforts
to inform and account to the population have been reflected in media
coverage focused on newspaper and radio, which produced 3,824
separate references to the funds provided. The greater popular
understanding of mining generated among the community was reflected
in a survey of 364 local citizens. This showed that the proportion with an
understanding, measured by a pass score in a multiple-choice test, of
basic concepts such as how revenue is generated and distributed and
how it gets to local government had increased from an initial score of
under 10% to more than 30%.
The Cluster-Programme aims to create a win-win relationship based on
the understanding that the challenges facing a mining company can
stimulate suppliers to develop greater technological and managerial
capabilities. Suppliers capable and willing to meeting these challenges
with innovation are identified and pre-evaluated. They then submit
tenders and commit to a collaborative process of development that
creates long-term value for both the mining industry and Chilean
economy.
By 2020, the programme aims to develop more than 250 world-class
suppliers – defined by the ability to export technology and knowledge
intensive services to other mining countries and sectors of the Chilean
economy. Universities and technology centres also participate through
collaboration with suppliers. The long-term aim is to create two-way
relationships that extend the boundaries of technological research and
development.
Case Study 2: Royal Bafokeng Nation
training community leaders, South Africa
The Royal Bafokeng Nation consists of 29 villages, ruled by a hereditary
king and a Supreme Council, in South Africa’s North West Province. The
income it draws from its land, where the world’s largest platinum reserve
is mined, is invested through Royal Bafokeng Holdings, a communitybased investment company.
PLAN ‘35, the community’s blueprint for development, includes an
ambitious long-term plan to maximize the development of the Royal
Bafokeng Nation’s communal assets and human capital. The aim is to
achieve economic self-sufficiency beyond mining and to empower
individuals within the community.
The Personal Leadership Development Initiative focuses on developing
the skills of Bafokeng leaders. It provides training designed to give
dikgosana (headmen), traditional executive committee members,
councillors, school principals, executives and managers, and other local
leaders the skills needed to manage the nation’s affairs in a responsible
manner.
The Tertiary Education Programme funds loans, accommodation and
other services for students from the community. It also addresses skills
shortages and enhances employability by opening new technical and
vocational institutions. In February 2011, five institutions were in
operation, with 452 students enrolled.
Responsible Mineral Development Initiative 2011
9
Building Block 2: A Shared Understanding of the Costs and
Benefits, Risks and Responsibilities Related to Mineral Development
Stakeholders need a common view of how mineral development will
affect their country, region and local community. The key is that
discussions between stakeholders should be based on an agreed
understanding of costs, benefits, risks and responsibilities. This
understanding should ensure that they avoid the worst possible outcome,
under which one party gets all the benefits while another carries the costs
and risks, accompanied by a lack of clarity over the assignment of
responsibilities. All four aspects need to be addressed and clearly settled.
Mutual understanding helps companies by enabling informed debate
about costs and benefits, reducing from the start the risk of inflated
expectations or unfounded concerns. A clear perception of these
enables governments and civil society to justify their decisions and avoid
mistrust, misunderstanding and misconception.
The process should also include identifying issues, policies and
practices that maximize benefits for local communities and the country
as a whole. This protects them from being undermined by weak links in
the overall ecosystem of the wider development process.
Of the possible actions stakeholder discussed as practical steps
towards this shared understanding, implementing a rigorous and
collaborative socio-economic study was highlighted.
Highlighted Action: conduct rigorous and
collaborative socio-economic studies to foster
collective action
This action involves the evaluation of the full economic and social costs
and benefits of mining at national, regional or local level via an agreed,
rigorous and collaborative methodology, identifying issues, policies and
practices to maximize benefits for all stakeholders. Over the last
decades the sophistication of socio-economic impact studies has
developed considerably. There are numerous impact studies currently
undertaken in many parts of the world. As available tools and
methodology further improve, collaborative socio-economic studies will
continue to play a vital role in creating a shared understanding of
socio-economic impact of mining among shareholders.
Why this is helpful
A collaborative socio-economic study provides an objective evidence
base on which to build discussions, negotiations and establish
partnerships for further action plans. These evaluations could take place
at national, regional or local level.
Rigorous research can prove informative for even the most
knowledgeable stakeholders. A socio-economic study conducted in
Laos [Case Study 4] showed that mining is more important to the national
economy than hydro energy, a fact that came as a surprise to many.
Good data builds trust. Solid research will give all parties a clear
understanding of the timing and nature of the benefits, such as jobs and
royalties, to come from development.
For government and society, collaborative analysis helps identify ways in
which benefits can be maximized for the country and community [Case
Study 5]. ICMM’s Mining: Partnerships for Development Toolkit [Initiative
4] highlights a rigorous, balanced and objective socio-economic
assessment – identifying six potential areas for partnerships and
collaborative action and offering guidance on convening
multistakeholder workshops to scrutinize evidence and develop action
plans. Anglo American’s Socio-Economic Assessment Toolkit (SEAT),
launched in 2003, is another tool for developing a better understanding,
and engaging with the community.
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Responsible Mineral Development Initiative 2011
Overcoming potential barriers
Establishing agreed methodology can be problematic. Agreeing what
constitutes a benefit, which factors can realistically be included, and
then defining the value of impacts is not only complicated but often also
subjective. Estimating the value of an effect such as the role of mining in
strengthening the rule of law in a region is difficult.
Once methodology has been agreed, ensuring robust implementation
and maintaining credibility for the process pose further challenges.
Companies may be concerned that studies will delay projects and so be
reluctant to invest time and money, while governments are not always
convinced of the potential benefits. The necessary buy-in from affected
stakeholders may be lost through concerns about politicization or
external agendas affecting the assessment.
International organizations can help in two ways: by supplying
established methodologies such as the ICMM’s Mining: Partnerships for
Development Toolkit [Initiative 4]; or helping to raise awareness of the
benefits of good research. NGOs could use their contact networks to
play an important role here.
Looking forward
Companies should think about how to develop the in-house capacity
and expertise needed to deal with assessment to address local needs,
and how to best use existing and proven methodologies and toolsets.
Collaboration is essential to fully engaging all stakeholders, so
companies should aim to work with experts, governments, NGOs and
community stakeholders.
Governments need to be open and proactive in their engagement. By
thinking ahead how the process could fit into their procedures and
legislation and looking for ways to reduce bureaucratic barriers, they can
minimize time scales and make the assessment more efficient.
NGOs can play an active and collaborative role in enhancing the
methodology and research results, ensuring a neutral and unpoliticized
approach, and helping to push the conclusions towards practical next
steps.
A rigorous impact assessment could become part of standard global
procedure for mineral development, with companies, governments and
civil society all regarding it as the norm. A bank of practical experience is
already being built, thanks to existing initiatives including the ICMM. They
can minimize time frames and make the assessment process more
efficient.
Building Block 2: A Shared Understanding of the Costs and Benefits, Risks and Responsibilities Related to Mineral Development
Initiative 4: ICMM’s Mining: Partnerships for Case Study 4: Applying the ICMM toolkit in
Development Toolkit
Lao PDR
ICMM’s Mining: Partnerships for Development Toolkit, now in its third
version, provides companies, development agencies and other
stakeholders in mining countries with an objective analytical framework
for objectively assessing the sector’s likely economic and social
contribution at local, community, regional and national levels and its
interaction with existing government structures. It encourages
partnerships in six areas: linking mining to poverty reduction, revenue
management, regional development planning, local content, social
investment and dispute resolution.
This collaborative action can help combat the capacity limitations of
stakeholders, while enhancing mining’s social and economic
contribution. Stakeholders can debate the draft assessment of the
positive and negative economic and social effects of mining at incountry workshops that structure discussion and build specific
partnership-based action plans. These methods are of particular
relevance to the increasing numbers of lower- and middle-income
economies that have high levels of mineral dependence.
The toolkit was developed over several years based on in-depth country
case studies in Chile, Peru, Ghana, Tanzania, and Lao PDR, and it has
evolved through several iterations. This process has secured credibility
and rigour by establishing oversight from independent advisory panels,
and by collaborating with respected institutions including UNCTAD, the
World Bank Group and expert consultants. The common analytical
framework it provides helps to ensure that comparisons can be made of
mining’s contributions and impacts across different countries.
The toolkit consists of eight modules designed to address seven specific
topics, with guidance on sources of data, analysis and worked examples
(modules one to seven); and guidance on communicating the results
found (module eight). There are a number of worksheets and database
templates available to download on the ICMM’s website to help complete
each of the modules in the toolkit. The modules are defined as:
1.
Mining and the host country
2.
The participating mining operation and its economic and social
initiatives and partners
3.
Measuring the mining industry’s contribution to the host country
4.
Identifying the aspects of governance that help or hinder mining’s
economic and social performance
5.
Measuring the participating mine’s positive and negative
contributions to local communities
6.
Analysing the life cycle impact of the participating mine on the host
country’s macroeconomic aggregates
7.
Impact of mining on governance
8.
Communicating your findings
Addendum: Guiding principles regarding minerals taxation
The toolkit’s collaborative assessment process allows shared findings to
be used to develop an improved understanding of the issues, policies
and practices that may be helping or preventing host communities,
regions or the country from benefiting more fully from mining. The
multistakeholder action plans that are developed provide concrete steps
for enhancing mining’s contribution. Since 2006, the toolkit has been
applied in nine countries, and implementation in the 10th country, Brazil,
is currently underway.
The ICMM toolkit was used to examine the economic and social
contribution of large-scale mining operations to Lao PDR by MMG,
PanAust and Rio Tinto. The government, fearful of the “resource curse”,
challenged companies to seek downstream processing and considered
renegotiating mining agreements. Local communities and national
assembly members voiced concern about the environmental impacts of
mining, while donors worried about government’s ability to manage
revenues.
Over nine months a core team of consultants and academics worked
closely with companies, government and International NGOs. Their
economic analysis surprised many by showing that mining was more
important to the national economy than hydro energy. Since 2003, it has
accounted for 80% of foreign direct investment, 45% of exports and 12%
of government revenues. The two mines will contribute 10% to GDP over
the next 14 years, mainly through profits made by the two companies.
They have raised local incomes by five-fold and nine-fold respectively, and
improved living standards. This progress was driven by two key factors:
partnerships integrating large-scale mining companies into the host
economy and good governance. The national government responded to
the additional needs of mining areas by strengthening local government.
Findings were debated at a multistakeholder workshop in Vientiane, with
participants including Chinese companies; representatives from the
national assembly, national and provincial government; NGOs; and
development agencies. Participants ranked the six Mining Partnership
for Development themes in order of priority, rating mining and poverty
reduction and mining and revenue management as the top two. They
also suggested steps their own organizations could take to help
enhance mining’s contribution across all six themes.
Case Study 5: Newmont conducting
economic impact study, Ghana
Global gold producer Newmont Mining Corporation operates the Ahafo
mine in the Brong-Ahafo region, through its Newmont Ghana Gold
Limited (NGGL) subsidiary. It commissioned the research because,
while gold mining is significant and growing in Ghana – contributing
6.3% of GDP and 43 % of exports in 2009, some stakeholders believed
that benefits were only reaching a minority. It was argued that mining
was an “enclave economy” with most profits going abroad. The aim was
to create a common understanding of the costs and benefits of mining
by explaining them more fully.
An independent study of NGGL’s economic impact was commissioned.
It used quantitative publicly available financial data from company
operations, applying Ghana’s national Social Accounting Matrix to
estimate mining’s effects on employment, taxes and incomes. Interviews
were used to assess relations with communities and other stakeholders,
while other data was gathered through collaboration with ministries and
government agencies, civil society organizations, District Chief
Executive (local government) chiefs and communities.
The report, widely accepted because of this stakeholder involvement,
showed mining’s impact on Ghana’s economy, and improved the
knowledge of both the company and stakeholders about its overall
social impact. The findings enabled the company to identify further
opportunities to enhance positive and minimize negative impacts and
form a basis for future company communication, stakeholder
engagement and similar studies in other regions.
Responsible Mineral Development Initiative 2011
11
Building Block 3: Collaborative Processes for Stakeholder
Engagement throughout the Life Cycle of Mining Projects
Successful, constructive stakeholder engagement is not about quantity,
but rather getting it right – the right people and the right amount, in the
right way.
It can be at a local, regional or national level, depending on the structure
of governance and the need. In some cases more than one level of
engagement may be needed. However, each process should offer
consistent and inclusive dialogue between stakeholders throughout the
life cycle of a project. Sustainable, responsible development based on
trust and stability will only be achieved if there is somewhere for
stakeholders to meet for an open, honest, robust dialogue, explaining
decisions and debating contentious issues.
Engagement should start at the earliest possible stage and will only be
effective if it operates throughout the life cycle of the project.
Consistent collaboration helps to manage and withstand changing
circumstances. Inevitably there will be points of initial disagreement and
potential dispute. Stakeholders should expect, and be prepared, to
address these constructively.
Of the many possible processes for collaboration stakeholders
highlighted two: developing national, multistakeholder dialogue
platforms and setting up local development councils for life cycle
planning and collaboration.
Highlighted Action: establish
multistakeholder national dialogue platforms
National platforms have the potential to offer consistent, inclusive
dialogue and collaboration among stakeholders on a countrywide
sector basis. The aim is to enable responsible development, find
synergies and align stakeholders, and devise action plans for longerterm working partnerships. It should mean that every project begins with
structures for engagement throughout its life cycle already in place.
Why this is helpful
An effective dialogue platform enables debate at national level, bringing
together stakeholders, including critics, for the open discussions needed
for long-term trust and stability. Dialogue should start as early as possible,
ideally as soon as development is first discussed. However, platforms can
also help more mature mining countries by enhancing the robustness and
durability of relationships, and agreements among stakeholders.
At their best, platforms will enable the development of trust based on full
understanding of other parties’ language, priorities and views. They will
provide the flexibility to accommodate changing societal values and
policy shifts. Through respectful debate, views can be exchanged and
mutual understandings formed between stakeholders previously locked
into adversarial relationships. Topics for discussion should be defined by
the key stakeholders involved and could cover themes such as:
• How mining can be linked to poverty reduction agendas
• Integrating mining projects into the broader national, regional and
local economies
• Interacting mining with other economic sectors such as agriculture
and tourisms
• Building of local and national supply chains and technical expertise
• Understanding the full contribution of mining, including distribution
model for tax and royalty income derived from mineral development
• Environmental standards and reclamation planning
• Role of mining in a country’s climate change strategies; community
health monitoring
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Responsible Mineral Development Initiative 2011
By creating a stable base for discussion platforms make company
investments more secure. Governments are helped to build in-house
capacity while the skills of stakeholders are coordinated to enable a
structured, balanced development process for the country.
Overcoming potential barriers
There are potential pitfalls. The infrastructure necessary for the process
may not exist. It can be hard to identify exactly which stakeholders are
needed to make the process legitimate, viable and effective, and there is
a risk of obstructive politicization. Companies may lack confidence in the
process, while governments could fail to engage and NGOs could fear
that the platform is biased towards industry.
Commitment from government and support by international bodies and
initiatives can help form the necessary infrastructure. Inclusiveness is
essential, bringing in policy-makers and high-level representatives from
all stakeholder groups, and ensuring that each has equal representation.
An independent chair and secretariat are necessary for both capability
and credibility. Pilot projects should be used to develop and refine the
process, including setting agreed metrics and success criteria.
The early definition of clear objectives for the dialogue platform is vital to
ensuring consensus between participants. Commitment from the
highest levels of the public sector and relevant companies is required to
push the dialogue platform and results forward.
To prevent the platform becoming overwhelmed by the volume of content,
smaller expert working groups can deal with specific topics and report
back to the main body, as in the Mongolian example [Case Study 6].
Looking forward
Companies and governments need to consider who will best represent
them on the platforms. The independent chair, facilitator and secretariat
will have key enabling roles, and it is very difficult for those identified with
either government or industry to fulfil them. A credible, independent
body, such as an academic institution, could play a vital role as facilitator
and be supported by NGOs, reconciling different stakeholder views,
including those from the affected communities. Schemes such as the
Devonshire Initiative, housed at the University of Ottawa in Canada,
highlight the impact potential of positive and proactive collaboration
between NGOs, government and the private sector on an independent
platform [Initiative 5].
Each platform will be unique, and this model may not suit every country,
but valuable lessons can be learned as more are established worldwide.
Building Block 3: Collaborative Processes for Stakeholder Engagement throughout the Life Cycle of Mining Projects
Case Study 6: Establishing a national
dialogue platform in Mongolia
Mongolia has more than 7,500 identified mineral deposits, including 15
classified as strategically significant, with an additional 37 that have the
potential to be classified as such. The country has high expectations for
mineral development, but faces challenges related to environmental
practice and social investments. There is some distrust between
industry and civil society, whose organizations are concerned that
mineral development will benefit only government and foreign
companies. Stakeholders called for stronger dialogue, cooperation and
transparency over mineral development and its impact on the country.
Mining should be connected to the local economy, infrastructure and
community development.
Beginning in 2006, leaders from Mongolian government, companies
and NGOs, brought together by the Asia Foundation, began to explore
more cooperative approaches to the challenges facing the industry. This
dialogue led to the development of a Declaration on Responsible Mining.
This was based on eight key principles and a definition of responsible
mining. This declaration underpinned the creation of the independent
Responsible Mining Initiative for Sustainable Development (RMI), which
achieved official recognition as an NGO in 2007. More than 60
organizations have declared support for the Declaration on Responsible
Mining.
In 2010, the World Economic Forum convened a roundtable
multistakeholder discussion in collaboration with the Office of the
President and the Government of Mongolia. Meeting again in 2011, the
participants identified practical steps including the formation of working
groups to focus on individual topics. One group, supported by the
Ministry of Mineral Resources and Energy, works with the RMI to
develop criteria aimed to measure the progress of responsible mining.
These criteria will be made publicly available.
During the second national dialogue organized by the World Economic
Forum the Forum’s Partnership Against Corruption Initiative (PACI) was
launched in Mongolia. Under the joint leadership of the Government of
Mongolia and the Mongolia National Chamber of Commerce, over 150
business leaders (as of December 2011) across all industry sectors have
pledged to adopt a zero-tolerance policy against corruption.
Initiative 5: The Devonshire Initiative, forum
for NGOs, mining companies and
government
This initiative was founded at a cross-sector workshop at the University
of Toronto in 2007, and moved to the University of Ottawa in 2010. It
aims to provide an iterative, long-term venue to bring together NGOs
and mining companies, which traditionally had limited contact and were
prone to mutual distrust and misunderstanding. Limited contact meant
that companies made little use of NGO expertise, while the NGOs
missed the chance to steer private sector development onto more
socially sensitive and equitable paths. The initiative aims to harness their
joint expertise to improve social and community development outcomes
in emerging markets.
A part-time director, who reports to a six-member committee equally
drawn from industry and NGOs, runs the Initiative. The University of
Ottawa provides administrative support. NGO members provide both
meeting space and personnel. Industry members pay an annual
membership fee that covers operating costs.
More than a dozen formal workshops have been held and an on-theground pilot has been launched in Honduras. Company-NGO relations
have improved as mutual understanding grows and good practice is
shared. The Canadian government regularly participates in workshops
with representation from relevant departments and agencies.
Four specific outcomes have been targeted:
• Enhanced in-country capacity to improve understanding of mining
investments and produce tangible benefits
• Concrete examples of CSR to improve the industry’s image
• More effective cross-sector engagement with an understanding of
community development issues
• Using good practice and strategic partnerships to inform policy
development
Responsible Mineral Development Initiative 2011
13
Building Block 3: Collaborative Processes for Stakeholder Engagement throughout the Life Cycle of Mining Projects
Highlighted Action: set up local development
councils
In contrast to the suggested national dialogue platforms, a local
development council offers a democratic space at local level. It may deal
with one project or a small group. It should include representatives of
local stakeholders such as indigenous population groups and
community leaders, alongside NGOs, local government and the private
sector, including the mining company.
It should debate local needs and establish long-term directions for
regional development, involving all stakeholders. In collaboration with
the local government, the council may take responsibility for the pooling
and distribution of available funds for local development. Where this
does not happen, it should still focus on ensuring that funds are invested
to make the community sustainable over the long term. Development
must be planned collaboratively and linked constructively with the
mining plans. Finally, and crucially, the council should develop its own
metrics and success criteria.
It is essential to maintain communication with other national- or
regional-level stakeholder engagement processes such as national
dialogue platforms. This ensures a consistent two-way flow of
information and effective coordination between levels.
Why this is helpful
A local dimension is indispensable. The communities around
developments bear the consequences of mining, both environmental
and social, and are left with the impact after its life cycle has ended.
They often worry they will receive only limited benefits, while bearing
most of the costs, with profits taken often abroad by the mining
company, and tax and royalty revenue flowing to central government.
These concerns, and the mistrust they bring, should be taken seriously
from the start.
Creating trust at local level helps limit the risk of disputes, heading off
trouble before it escalates (as seen in the Alcoa project, Juruti [Case
Study 7]. Companies, governments and development agencies all need
to work together, through long-term participatory development planning,
at both regional and local levels to build a supply chain for jobs.
Research shows that unless this happens, expanded job opportunities
at local level cannot be guaranteed. Companies can build relationships
with communities and explain the benefits of mining [Case Study 8].
National government benefits as issues are addressed locally, freeing
central capacity. Civil society can use the opportunities of engagement
with the company and local government to develop administrative,
financial and communication skills. The needs of the local population,
such as economic diversification, are considered and built into longerterm planning. Local development councils can offer communities an
effective, realistic mechanism for involvement in decisions of great
importance to them.
Overcoming potential barriers
Possible hurdles include mistrust compounded by language barriers
and differences in worldview. The councils must have credibility with the
local community. A lack of confidence will follow if it appears to either
have little real power, or be run by the company.
Companies may worry that the creation of councils will slow and add
complication to projects, and so might be wary of committing time and
resources. Government, both local and national, may be unwilling to
devolve powers. At the same time, municipal authorities may find
themselves relying too heavily on the council and company to provide
governance. Interaction and collaboration between the council and local
government is crucial to enable a coordinated approach to
development.
There should be public consultation with both government and
community representatives over the benefits of the council, while
members should be properly trained. The community needs to feel a
sense of ownership of the council. A commonly observed mistake by
companies in CSR programmes is taking a paternalistic approach.
These programmes often fail to achieve their objectives, as communities
reject as self-serving programmes designed on the assumption that the
company knows best. Giving the community the ability to select council
members, proper training in the management of the council, and giving
the council responsibility for a local development fund, as in Juruti [Case
Study 7] will both empower the community and give it a valuable,
credible function. This could also build the type of institutional capacity
that is often lacking in poorer, more remote communities.
Initial seed funding and perhaps running costs could either be provided
by the local government or company as part of their development
contribution, or perhaps more neutrally through a third-party source or
pooled development fund, depending on the circumstances of the
project.
The initial establishment and running of the council may require external
assistance from a neutral third party such as an experienced NGO,
either global or local. This should also ensure maximum efficiency in
both time and funds, aided by use of global good practice.
Looking forward
Companies can both aid the creation of councils and earn stakeholder
trust by acting as arms-length facilitators during formation. In some
cases the community will, given arms-length company help, have the
know-how and organizing capacity to form an effective council on its
own. In others more help is needed and the company may need to
arrange this through collaboration with a third party such as a local
NGO. Governments need to work with councils to ensure they are given
a clear charter, with sufficient space to act while ensuring that municipal
support and involvement are maintained. NGOs can constructively
engage, using their unmatched local experience to help companies to
understand the positions and concerns of the local population.
How might a mining community with an effective local development
council look? Local governments and companies work in a genuinely
collaborative way, prioritizing involvement with local businesses,
community leaders and on-the-ground NGOs. Communities are able to
take a proactive approach to mineral development in their local area, feel
a sense of ownership in broader development decisions made for their
area, and can see the results of their decisions becoming reality in a
joined-up, coordinated process.
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Responsible Mineral Development Initiative 2011
Building Block 3: Collaborative Processes for Stakeholder Engagement throughout the Life Cycle of Mining Projects
Case Study 7: Alcoa setting up local
development council, Juruti, Brazil
Case Study 8: Cree Nation and Goldcorp
signing cooperation agreements, Quebec
Alcoa, the world’s largest bauxite mining company with 10 active
projects worldwide, has been mining in the Juruti region of Brazil since
2009. The region, lacking financial resources, was not ready for the
impact of a large-scale project. Alcoa sought to engage with the
stakeholders to understand how best to maximize the socio-economic
benefits of the project for the region.
Mining in Eeyou Istchee, homeland of the Cree Nation, dates back to the
1950s and should, given the variety of minerals and range of claims,
continue for many years. The Cree traditionally opposed mining projects
as irresponsible and inimical to their cultural heritage and values. At the
same time only a small proportion of the Cree population in the relatively
isolated communities of Northern Quebec have professional jobs. More
than half of the Cree Nation of Wemindji’s 1,400 residents are 45 or
under, creating growing concerns about employment and future
economic independence.
To do this, Alcoa adopted a three-pronged development strategy. A
local development council, with 12 to 15 representatives from industry,
government and NGOs was set up as a public area for dialogue, debate
and directing development for the region. Eight technical committees
were set up to cover issues such as health and environment. Alcoa also
created and seeded the Sustainable Juruti Fund (FUNJUS) to finance
initiatives identified by the council, and negotiated sustainable
development indicators giving the community its own success criteria
metrics and means of measuring them.
Brazilian business magazine, Exame, has included Alcoa six times on its
annual list of sustainable companies in Brazil, in 2010 choosing it as
Sustainable Company of the Year. Stakeholders have engaged actively
and 21 projects, including a school and a police station, were chosen for
FUNJUS funding in 2010. Community recognition of the benefits mining
brings was signalled by the results of opinion polls in 2008 and 2010
conducted by the Brazilian Institute of Public Opinion and Statistics
(IBOPE).
The foundations for collaboration were built in 1975 when the Cree and
the Quebec Government signed the James Bay and Northern Quebec
Agreement (JBNQA). It initiated rapid advancement and capacity
building among the Cree, and began to foster acceptance of resource
development in their traditional territory.
On 21 February 2011, Goldcorp and the Cree Nation of Wemindji signed
the Opinagow Collaboration Agreement to develop and operate the
Éléonore gold property. The two parties were engaged from the earliest
stage of exploration, supported by the Cree Government, whose Cree
Nation Mining Policy document explicitly encourages “direct and close
liaison” between communities and mining companies. It aims to ensure
Cree rights, interests and benefits are properly protected and promoted.
Cree Nation employed a legal representative and took a collaborative
position in negotiations. Goldcorp organized tours of project sites for
young members of the community aimed at improving their
understanding of mining process and highlighting employment
opportunities. The agreement specifies active Cree community
participation and partnership in the life cycle of the mine through
collaborations such as the co-writing of its environmental and social
impact assessment, and developing projects that benefit both company
and community.
The partnership addresses concerns about the economic future by
ensuring training, education and employment opportunities for local
Cree. Goldcorp has also pledged to invest funds in building a training
centre to enable a higher proportion of local employment at the mine
By prioritizing respect for the community’s values along with
environmental and economic sustainability, the partnership has created
a stable base for Goldcorp’s investment.
Responsible Mineral Development Initiative 2011
15
Building Block 4: Transparent Processes
and Arrangements
Transparency is more than a theoretical concept. Stakeholders should
be able to obtain information quickly and easily. It can help build
accountability and improve governance, shedding light on, and hence
deterring, inefficiencies or corruption. Broader trust among all
stakeholders is possible if companies and governments are open with
each other in negotiations, and their agreements are available to civil
society. Because communities know who is getting what and when, and
how this is expected to happen, misunderstanding is minimized. The
risk of opposition to development demands that agreements be
renegotiated and other threats to long-term stability are reduced.
If civil society is more informed about the content and progress of
negotiations, and has the opportunity to express its views on key issues
and trade-offs at some point in the process, all sides may benefit.
The clear trend towards greater transparency is demonstrated by
greater adherence to Extractive Industries Transparency Initiative (EITI)
standards, the recent Dodd-Frank Act in the United States and
transparency requirements established by the European Union. Taking a
proactive approach and going beyond minimum standards can help
strengthen trust and build a positive reputation.
Trust and accountability can be further underpinned by independent
auditing of data and figures, conducted through mechanisms like those
provided under EITI, or compliance with the International Monetary Fund
(IMF) guide on Resource Revenue Transparency. Broader auditing has
been suggested as well in the Federation of Indian Chambers of
Commerce and Industry (FICCI) report on Sustainability in Mining.4 This
calls for independent, reputable agencies to help audit mining plans,
post-mining closure and rehabilitation plans, and estimations of funds
required. This would ensure a clear and well-considered plan for the
whole life cycle of the project, ensuring that neither the mine nor the local
community is neglected after extraction ceases.
Informed by the current pace of EITI standard take-up, our stakeholder
consultation focused particularly on the opportunities for publishing
mining agreements and royalty and tax payments included in these
standards.
Highlighted Action: Publish relevant
agreements, tax and royalty payments
This action endorses the publication of mining contracts and associated
ancillary documents, and the tax, royalty and revenue data that flows
from the operation of these agreements.
A high proportion of mineral development, particularly in the poorest
countries, is conducted under Mineral Development Agreements
between governments and companies. Governments should ensure
that these documents, and those laying out tax and royalty data, are
accessible to the public. The Revenue Watch Index requirements for
document transparency say they should be accessible to all citizens
through the press, Internet, libraries and responsible ministries.
4
Beyond License to Operate – Indian Mining: Solving the Sustainability Conundrum, jointly developed
report on sustainable mining by Federation of Indian Chambers of Commerce and Industry (FICCI)
and The Boston Consulting Group [2011]
16
Responsible Mineral Development Initiative 2011
Why this is helpful
Governments and companies can make an immense contribution to
transparency and accountability by publishing these documents and
figures. Greater transparency will increase trust and reduce the risk of
misunderstandings. Local communities and the broader population can
easily obtain relevant information; form realistic expectations about the
likely impact of development and so contribute more effectively to the
development discussion. They also benefit from the incentives to better
performance in government provided by transparency, disclosure and
the consequent reduction in opportunities for corruption.
Such disclosures promote broader democratic engagement with the
community. Companies remove reasons for suspicion about their
motives. By improving their reputations, they reduce the risk of
resistance to current projects and build trust for future ones. If
publication becomes the norm globally, governments can learn from
examples and precedents in other countries, while improving their
reputations both internationally and with their own civil societies.
Overcoming potential barriers
Governments may be cautious of publication due to political sensitivities
or the fear of a “race to the bottom”, with standards lowered to match
competing countries. They may lack the capacity to implement a
publication policy. Parts of civil society may struggle to decode the
documents, which are often written in opaque legal and governmental
terminology. As a result, they often cannot use information.
Companies may be concerned about the exposure of commercially
sensitive information. Small companies in particular may lack the extra
capacity to take on additional processes. Even if positive in principle,
they may be limited by confidentiality agreements or reluctant to be a
first mover.
Concerns over publishing agreements can be overcome via Freedom of
Information legislation or by collaborating with NGOs, like Transparency
International, as a partner to work with companies on refining
confidentiality agreements. Companies may be concerned about losing
out by being the first to publish. They could aim to build a consensus on
action across their industries to test the issue through pilot projects, and
look to the example of countries like Niger and Liberia that already have
publication agreements in place [Case Study 9].
Barriers related to tax and revenue can be combated by gathering
comprehensive information on whether disclosure will affect
competitiveness, compiling a list of willing parties, and seeking a
consensus between key industry players to make publication a standard
procedure.
The EITI provides a recognized standard and framework to help
governments achieve transparency. Signing up to the Publish What You
Pay Coalition can also help, as will the introduction of legislation to
require compliance. NGOs may use their expertise to press for
measures similar to Dodd-Frank, while companies that believe
legislation is likely should consider the potential benefits to their
reputation of being a voluntary first mover. In 2011, Rio Tinto redesigned
and increased the level of its tax payment reporting processes [Case
Study 10].
Building Block 4: Transparent Processes and Arrangements
Looking forward
Governments and companies should evaluate the benefits of publishing
information related to their mining projects and how they can make sure
that published information is properly understood and interpreted by the
audience. Websites and newspapers remain essential channels for
disseminating this information. Governments should assess how to
become EITI-compliant, leveraging the framework that EITI provides.
[Initiative 6]
NGOs can promote more transparency, and implement the best means
in their region for monitoring transparency process. To ensure full
advantage is taken of the information disclosed, NGOs and civil society
can seek assistance from the Access Initiative and other enabling
bodies [Initiative 7].
The US Dodd-Frank Act and ever-stricter legislation in the European
Union reflect rising expectations for the level, breadth and clarity of
publication. The International Financial Corporation (IFC) commits clients
to disclosing payments to host governments such as royalties,
dividends, taxes, and signature bonuses. IFC further raised the bar at
the start of 2012 by requiring that the principal contract for any financed
project be made public within two years.
All of this shows growing international recognition that transparency
brings far-reaching benefits to society, not least enabling greater
accountability.
Initiative 6: EITI – a global transparency
standard
The EITI (Extractive Industries Transparency Initiative) is the global
standard for transparency in the governance of natural resources. Each
of the implementing countries has created its own EITI process, which is
overseen by stakeholders from government, companies and civil
society.
It provides a standardized, internationally recognized methodology for
monitoring and reconciling company payments and government
revenues at country level. Countries joining must fulfil five sign-up
commitments followed by 15 compliance actions. These include
publishing a workplan with measurable targets and a timetable;
establishing a multistakeholder steering group; and regular, publicly
accessible publication of mining payments and revenues, which are
subject to independent audit.
Increasing scrutiny of payments makes revenue collection more efficient.
EITI also promotes the accountability of companies and governments
and more constructive company engagement with citizens and civil
society.
Companies operating in EITI-compliant countries – there are currently
11, with a further 23 at candidate stage – are required to publish what
they pay to the government. In Ghana, implementation has gone beyond
EITI minimum requirements by supplying tax and royalty payment
disclosure on a disaggregated, project-by-project basis.
Initiative 7: The Access Initiative, network of
civil society organizations
The Access Initiative (TAI) is a network of civil society organizations –
including the World Resources Institute in the United States, Corporation
PARTICIPA in Chile, and CODELT in the Democratic Republic of Congo
– working to give citizens the ability to influence decisions on natural
resources by promoting access to information, participation and justice
in environmental decision-making.
TAI partners work to engage governments and assess their
performance in providing public access to decisions, participation in
decision-making and access to justice when rights are violated.
Coalitions of civil society organizations conduct national-level
assessments of government policies and practices, performing legal
research and case study analysis according to an internationally
recognized research method. Partners then perform advocacy work,
often in collaboration with champions within their governments, to
promote improved access rights in their country. Their detailed
assessments and advocacy have contributed to many transparency
successes, including the passing of Freedom of Information Acts in
Uganda and Indonesia, improved public participation guidelines in Chile
and the establishment of a National Green Tribunal in India.
Local development forums will find TAI and its partners a valuable
resource for capacity building and access to information. They aim to
build local civil society and government capacity, enabling participation
in decision-making, in particular by running workshops to highlight
information channels and alternatives where channels are lacking. TAI
works on a country-by-country basis due to differing governmental and
social environments, and priorities.
Responsible Mineral Development Initiative 2011
17
Building Block 4: Transparent Processes and Arrangements
Case Study 9: Liberia publishing mining
agreements and payments
Case Study 10: Rio Tinto Group publishing
tax and royalty payments
Liberia’s decision, as part of the Liberian Extractive Industries
Transparency Initiative Act of 2009, to publish all mining agreements and
tax payments from 2008 was a response to the uncertain investment
climate created by the devastating civil war of the 1990s. The civil war
destroyed infrastructure and halted iron ore extraction, a situation
compounded by residual political uncertainty, lack of transparency and
concerns over corruption.
Rio Tinto, a leading international mining group, has expressly supported
the EITI since its launch in 2002 and has undertaken some voluntary
reporting of tax data for several years.
Modest economic growth since the election of a democratic
government in 2005 has included a revival in the mining industry.
However, Liberia’s deposits of gold, diamonds and iron ore make mining
a potential engine for more significant growth.
Liberia became the second country to obtain EITI compliance, passed a
Freedom of Information Act and established a Liberian EITI, chaired by
the Minister of Finance, which is mandated to systematically publish
contracts via a website.
This has created greater accountability for the government, given
stakeholders access to the terms of contracts and is a useful resource
for other governments, which can compare Liberian contracts to their
own, redressing information asymmetry. This should ensure more
stable, durable contracts.
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Responsible Mineral Development Initiative 2011
In 2011, the Group redesigned and increased its level of tax reporting
processes with the publication of its Taxes Paid in 2010 report. This laid
out the taxes paid to governments in the 28 main countries in which it
has revenue-generating operations, also covering the tax and earnings
of business units. It included all payments over US$ 1 million, defining
tax as any money required to be paid directly to a government – such as
corporate income tax, royalties, license fees, permitting fees, property
tax, employment tax, sales tax, stamp duties, etc.
For non-controlled joint ventures and associates, the report included
shares of payments consistent with Rio Tinto’s level of equity, and laid
out analysis of payments by tax type, country and business unit.
Combined with countries’ revenue data, the tax reporting has been
used to promote greater trust and accountability. The move by Rio Tinto
has received praise from NGOs, the EITI and Publish What You Pay. The
Taxes Paid in 2010 report was awarded a Building Public Trust award for
tax reporting by an FTSE 100 company.
Building Block 5: Thorough Compliance,
Monitoring and Enforcement of Commitments
The often long and complicated negotiations around mining agreements
and contracts can result in less attention being paid to the procurement
process, compliance and the enforcement of commitments.
Rigorous, universally understood standards for awarding contracts – not
only those between government and companies, but also additional
contracts of public interest for development work, mining-related
infrastructure improvements, etc. – will ensure accountability and
transparency, and reduce opportunities for graft. The work of the World
Bank Institute in Ghana has helped to bring the issue of procurement
monitoring to the attention of the parliament [Case Study 11].
Beyond this, agreed commitments should be monitored for compliance
and performance, and clear guidelines set for establishing whether all
parties are living up to their promises. Where development occurs
efficiently and the results of commitments are visible, positive attitudes
towards mineral development are fostered and stakeholder relationships
strengthened.
Government can help by improving coordination between state bodies,
separating the contract awarding and monitoring processes, and
enhancing budget allocations. Stakeholders discussed in particular the
merits of establishing commonly agreed compliance, monitoring and
enforcement mechanisms.
Highlighted Action: develop commonly
agreed compliance monitoring and
enforcement mechanisms
Clarity should be established from an early stage, with stakeholder
discussion and agreement on mechanisms for compliance, monitoring
and enforcement. Who has agreed to what, which parties have which
roles, what are the processes, and how will this be enforced?
The greatest impact can be made by putting in place mechanisms
agreed by all parties to tackle areas vulnerable to limited capacity,
misuse or corruption.
Why this is helpful
If the agreed terms of contracts are being met, companies, governments
and civil society all benefit from this being known. If they are not, there
have to be means for enforcement and redress.
The expectations of all parties should be clearly laid out by explicit
agreements. Efficiencies will occur and all will benefit when roles and
mandates are commonly understood and agreed.
Governments can both track and account for company commitments
more effectively and make more efficient use of revenues. Community
expectations will be realistic, based on clarity of information, and
involvement in discussions. Accountability of governments and
companies will be increased and opportunities for corruption minimized.
Overcoming potential barriers
One possible barrier for companies may be reluctance to take on
additional processes and discussions. Government may have a number
of potential handicaps – reluctance to reform, inadequate capacity for
full monitoring or for better procurement procedures, and poor access
to information. The latter can also act as a barrier for civil society.
Companies can include this dialogue in a wider stakeholder
engagement programme, while the stakeholders can use initiatives such
as the World Bank Institute’s contract monitoring programme [Initiative
8] to help coordinate engagement. A lack of regulatory capacity can be
compensated for by partnerships engaging civil society to help monitor
compliance, and the incorporation of compliance monitoring
mechanisms into the mandate of national and local dialogue platforms.
Looking forward
Better, more comprehensive monitoring can raise community
understanding of the benefits of mining, so it is in the interest of
companies to look for ways to strengthen their monitoring capacity.
Governments need to identify the weaknesses in their systems for
awarding, implementing and monitoring contracts. They should seek
support and information on good practice from international
organizations. NGOs and communities should think about their possible
roles in monitoring compliance.
Formal government processes for awarding contracts, including
requests for tender, should leave no room for bribery or favouritism.
While government institutions should be capable of full monitoring
compliance, they may initially lack capacity. While capacity is
developing, civil society and organizations can help to monitor
contracts, aided by contract transparency and communication.
Responsible Mineral Development Initiative 2011
19
Building Block 5: Thorough Compliance, Monitoring and Enforcement of Commitments
Initiative 8: World Bank Institute contract
monitoring initiative
Sponsored by the World Bank Institute (WBI), which aims to develop
capacity through the exchange of knowledge, and the bank’s Africa
region, this initiative encourages collaboration among stakeholders to
oversee the awarding and implementation of contracts.
Already active in Ghana, Liberia, Sierra Leone, Tanzania, Uganda and
Zambia, the programme is expanding into Francophone Africa and
looking to work with initiatives in other regions, particularly East Asia.
It is driven by underlying concerns, including the inability of governments
to monitor or enforce contracts, opaque systems for awarding and
monitoring, and negative views towards development resulting from
unrealistic expectations about the pace or scope of expected benefits.
WBI operates through regional workshops involving stakeholders from
different countries. They form coalitions for each country that identify
priorities, and then create action plans for more effective and
transparent procurement and monitoring. The WBI also provides
sustained support for the coalitions.
The activities it supports include the analysis of new oil contracts,
training civil society organizations to monitor social and environmental
compliance, monitoring the impact of artisanal mines in specific
sub-regions, and building the understanding of oil contracts among
stakeholders in potential new producer countries.
Case Study 11: World Bank Institute
convening contract-monitoring coalition,
Ghana
This coalition was stimulated by doubts concerning the contribution
made by the mineral sector, which employs around 15,000 in the formal
large-scale mining industry and around 500,000 in informal small-scale
mining and quarrying. In 2005, export revenues from the mineral sector
totalled US$ 1 billion. Parliament had yet to address compliance issues,
the government lacked the funds and capacity to monitor compliance or
track impacts, and civil society did not have the necessary access to
information and training.
The World Bank Institute drew together stakeholders to fill gaps in
government capacity, encouraging them to collaborate in overseeing the
awarding and implementation of contracts. It convened a
multistakeholder coalition, capable of setting its own priorities, and with
assistance from Revenue Watch, monitoring implementation. The
coalition also campaigned for parliament to add contract monitoring to
the remit of its Public Accounts Committee.
The coalition has succeeded in getting procurement monitoring on to
the agenda of the Public Accounts Committee and the Auditor General,
who will be reporting to parliament on the issue. The coalition will
respond to this report, while parliament offers recommendations to
government on improving the system. That the report will open up
otherwise unobtainable information to the wider population is part of the
coalition’s contribution to strengthening ties and the sharing of
information between parliament and civil society.
The coalition is focusing on artisanal mining and will monitor gold
production in one sub-region, with the aim of making local communities
and national government aware of findings and their implications.
20
Responsible Mineral Development Initiative 2011
Building Block 6: Early and Comprehensive
Dispute Management
Even with full transparency and the best possible compliance
monitoring, there will inevitably be disagreements among stakeholders.
All parties need pre-agreed means of preventing disagreements from
escalating.
Discussion about how to manage potential disputes can help drive the
collaborative process forward. It acts as a door opener, creating a safe
place for finding common ground among stakeholders, identifying and
addressing concerns early on, thereby averting potential disputes.
While there is much available guidance on managing disputes
effectively, the struggle is to put this into practice. Good communication,
leading to a clear understanding of the process on all sides and
thorough implementation are vital to ensuring the associated benefits of
stability, collaboration and improved trust.
Which of the many models for dispute management is best depends on
the circumstances of the project, the company, the legal regime and the
community. From the use of country ombudsmen and counsellors [Case
Study 13], to local community dispute resolution groups, the key is to
establish and communicate them early in the process. The means of
establishing effective stakeholder dispute resolution mechanisms are
discussed in more detail below.
Highlighted Action: prepare effective dispute
resolution mechanisms
A serious grievance and dispute resolution procedure, capable of
dealing with any potential disagreement, should be set up in partnership
with all stakeholders. The procedures should be published as widely as
possible at the beginning of the development process, so that they are
clearly understood before any grievances arise. The mechanisms should
take into account national and international human rights legislation and
codes of conduct. They need to ensure all stakeholders have meaningful
access to agreed grievance and dispute resolution procedures.
Why this is helpful
In the complex, contested environment of mineral development,
differences in interests and priorities will inevitably result in
disagreements between stakeholders. When they occur, it is essential to
stop them escalating into a serious conflict that can endanger the
stability of a project.
Overcoming potential barriers
Creating effective mechanisms can be hampered by an overall lack of
experience and capacity. Companies may find it difficult to raise
awareness of their importance, and to ensure that high standards are
maintained across their whole range of operations. Civil society can be
handicapped by lack of information about the existence of schemes and
how to best access them.
These problems can be countered by seeking guidance from
international organizations, industry groups or academic studies and
publications such as the Harvard Kennedy School’s Rights-Compatible
Grievance Mechanisms [Initiative 9]. Mining companies should set
company-wide standards, assign responsibility at each site, consider
using electronic tools to track, evaluate and ensure minimum standards
and work with local community groups to raise awareness of the
mechanism. [Case Study 12]
Looking Forward
All stakeholder groups, from companies, government and civil society,
should play an active role in aiming for commonly agreed dispute
resolution mechanisms. Adequate, internal processes to deal initially
with issues within each stakeholder group should complement these
mechanisms. Both internally and externally agreed mechanisms should
be established before any dispute occurs. These mechanisms could
also be linked to established dialogue platforms. NGOs may find that
their skills and expertise give them an important role in communicating
information and providing both early warnings and mediation.
The concept of social risk, and finding methods to mitigate it, have been
gaining traction within businesses – particularly those operating in
developing countries – for some years. There is growing recognition that
substantive grievance mechanisms are not only essential to ensure
compliance with human rights standards, but also have a considerable
role in protecting investments and making large capital expenditures
less risky. This understanding will continue to grow, and companies
looking to implement grievance mechanisms will need proper guidance.
Good practice already exists and can only improve with time and
experience.
Establishing an effective dispute resolution mechanism sets out a clear
process from the beginning. It can help companies to avoid costly,
time-consuming disputes and the reputation damage that can come
from litigation or campaigns against them. Governments will have a
more equitable relationship with companies, and the grievances of civil
society can be dealt with rapidly and fairly. In addition, as discussed
above, engagement among stakeholders to establish the mechanism
can help greater understanding and learning.
Responsible Mineral Development Initiative 2011
21
Building Block 6: Early and Comprehensive Dispute Management
Initiative 9: Harvard Kennedy School
grievance mechanism guidance
Developed by the Corporate Social Responsibility Initiative at the
Kennedy School of Government, Harvard University, the “rightscompatible grievance mechanism” is not focused solely on mining, but
aims to offer companies a flexible toolkit for grievance mechanisms.
It is based on seven key principles. The mechanism should be legitimate
and trusted, published and accessible, transparent, based on
engagement and dialogue, predictable in terms of process, fair and
empowering, and a source of continuous learning.
It offers 24 practical guidance points, such as creating an oversight
stakeholder body and agreeing to a time frame in which dialogue takes
precedence; 14 key indicators are suggested as a starting point for
monitoring the performance of the mechanism.
The seven key principles were piloted by the Corporate Social
Responsibility Initiative, enabling further learning for the extractive
industries and the fine-tuning of the guidance points, explained in the
pilot project report – Piloting Principles for Effective CompanyStakeholder Grievance Mechanisms: A Report of Lessons Learned.
They have been included in the UN Guiding Principles on Business and
Human Rights.
Case Study 12: Anglo American launching
company-wide guidance and tracking
system
In 2010, Anglo American, a global mining company with 107,000
employees at 70 to 80 project sites worldwide, launched a mandatory
standardized complaints and grievance procedure, including an
electronic tracking and monitoring system with data analysis capacities.
Complaints can be made anonymously and free of charge. Each
operation is required to nominate a complaints coordinator responsible
for processing complaints and further investigation. The company-wide
system records and tracks complaints, and classifies them according to
type and severity. It then allocates tasks, gives timelines and reminders
and refers the issue to either a review committee or mediation. The
system also includes evaluation and monitoring capabilities for senior
business unit and corporate management to follow the steps of
investigations, while each site must offer grievance mechanisms that
meet company minimum requirements laid down in its Socio-Economic
Assessment Toolbox.
The aim is to embed the system in company culture and procedures,
raising awareness on a site-by-site basis, training, generating reports
and auditing internally. Further guidance will be developed on the
management of social incidents and amicable dispute resolution.
Early indications are that it is contributing positively to a company culture
of integrity, openness and accountability.
Case Study 13: Canadian government
establishes Office of the Extractive Sector
CSR counsellor
In March 2010, the Office of the Extractive Sector CSR Counsellor was
opened as part of Canada’s broader CSR strategy for mining, oil and
gas. Its role is to actively promote responsible practices for Canadian
mining, oil and gas companies abroad and to resolve disputes
connected with the strategy’s endorsed performance guidelines. The
Office is unique as a home-based service designed exclusively for
extractive projects operating overseas. A public consultation process
involving more than 300 individuals and organizations established its
rules of procedures. Participants in the consultation included
representatives from industry, civil society and government in Canada,
Mexico, Mali and Senegal.
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Responsible Mineral Development Initiative 2011
Stakeholder Views of
the Value of Highlighted Actions
Eight actions have been highlighted as practical applications of the six
building blocks. This section presents the key findings from a survey of
stakeholder views of the likely value of the eight actions outlined above
to mining in their countries of interest. It covers the responses of 145
stakeholder representatives (from companies, government, civil society)
from 33 countries.
The survey showed a strong consensus that the proposed actions
would be useful: 64% said that the eight actions were “very” or
“extremely helpful” in advancing responsible mineral development in
their countries of interest [Exhibit 4].
Exhibit 4: Survey responses on view of overall helpfulness of actions
How helpful do you consider each action could be, to advance
responsible mineral development in the country you are most interested
in?
Average evaluation
Share of responses (%)
Extremely helpful
32
Very helpful
32
Additionally, the results indicate:
• Company representatives were most positive about conducting a
rigorous socio-economic study and establishing a national dialogue
platform. This suggests that creating a common understanding of
the costs and benefits of the mining operations is the basis for an
effective dialogue process.
• Public sector respondents were the most enthusiastic about the
actions as a whole, showing a strong desire to push them forward.
They were most strongly in favour of training and development
programmes and setting up a national dialogue platform.
• Civil society and NGOs agree with the public sector on the most
important two actions, but also highlight the need for effective
compliance monitoring to ensure that commitments are met.
27
Helpful
8
Slightly helpful
Not helpful
Rated among the most helpful actions by all stakeholder groups were
training and development programmes and the creation of a national
dialogue platform [Exhibit 5].
Exhibit 5: Survey results per action and stakeholder group
8
How helpful do you consider each action could be, to advance
responsible mineral development in the country you are most interested
in?
Companies
Global good practice
Training & development schemes
Public sector
51
Civil society/NGOs
75
63
62
Rigorous socio-economic study
68
National dialogue platforms
68
Local development councils
58
Publish relevant information
56
89
77
56
88
69
78
61
81
Compliance monitoring and enforcement
58
78
Effective conflict resolution
60
80
Overall
60
79
% Very/extremely helpful
74
58
69
62
65
Top three priorities
Source: World Economic Forum Survey, November 2011
Note: % responses Very/Extremely helpful for each action; “Companies” includes respondents from
mining associations, “Public sector” includes respondents from local and national government
Responsible Mineral Development Initiative 2011
23
Stakeholder Views of the Value of Highlighted Actions
How are the eight suggested actions seen on
a country level?
The relevance of any action depends on the national and regional
context. Thus, we examined the extent to which each of the eight
actions could address the challenges of mineral development in different
countries.
Perceptions of relevance for each action on a country level are
discussed below and detailed in Exhibit 6.
Use and contribute to a global repository of good practice guidance
Given its global nature, this action is relevant to all countries, but is
regarded as particularly important by respondents from less developed
nations such as Papua New Guinea, Kazakhstan and the Democratic
Republic of Congo. These countries are still relatively inexperienced in
mining and wish to learn from the experience and good practice of
others. Respondents see this action also highly relevant for Canada,
which is seeking both to promote good practice and to learn further
from other experiences.
Create tailored training and development programmes
There is great demand for this action. Its overall rating as “very” or
“extremely” helpful by 70% of stakeholders is the highest for any of the
eight actions. Demand appears strongest where the lack of human
capacity is most problematic and enhanced expertise at all layers of
government and in civil society could have immense impact. Papua New
Guinea, Tanzania, India and Botswana produced ratings of more than
80% while there is less demand in developed countries like Australia and
the United States.
Conduct rigorous and collaborative socio-economic studies
Two-thirds of all stakeholders consider rigorous socio-economic studies
“very” or “extremely” helpful to advancing responsible development.
This action is valued across all countries reflecting the benefits of a solid,
reliable fact base regardless of national development or industry
maturity. Nor are benefits confined to companies or countries new to
mining. Studies are valuable anywhere the costs and benefits of existing
operations have not been sufficiently examined, or when considering
projects involving a new mineral or in a different region. This action is
seen as most relevant for Tanzania, China and Colombia.
Establish multistakeholder national dialogue platform
We found that 69% of all stakeholders consider a national dialogue
platform would be “very” or “extremely” helpful. Responses are
strongest where it is felt that a platform could significantly enhance
dialogue, particularly if there are limitations in existing national
infrastructure. Papua New Guinea, Tanzania and Russia are seen as
likely to benefit the most, while it is rated among the three most valuable
actions for Argentina and Peru.
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Responsible Mineral Development Initiative 2011
Set up local development councils
Support for local development platforms and councils is seen across all
national development levels, with particular strength in countries such as
China, India, the United States and Canada where mining regions have
strong local communities. For Canada and the United States, it is seen
as the most valuable of the eight actions. Even when national
infrastructure and dialogue are in place, engagement and stakeholder
inclusion can be limited at community level. Mining projects are often
situated in isolated, less-developed regions of large countries or where
development may conflict with indigenous people’s traditions and
livelihoods. These councils offer a means of working constructively and
respectfully to advance responsible mineral development and benefit
the local community.
Publish relevant agreements, tax and royalty payments
Countries with opaque negotiation processes, limited stakeholder
inclusion or histories of corruption are likeliest to benefit from
transparency. This action inspired the most enthusiasm from Guinea,
Mongolia, Tanzania, Russia and the Democratic Republic of Congo,
where more than 70% rated it “very” or “extremely” helpful, but will work
best if implemented on a global scale.
Develop commonly agreed compliance monitoring and enforcement
mechanisms
This action was rated as a significant priority, and reckoned helpful by
more than 70% of respondents for India, the Democratic Republic of
Congo, Mongolia, China, Colombia and Peru. There was a positive
reaction across all levels, with no country rating it below 40%.
Prepare effective dispute resolution mechanisms
Demand for effective dispute resolution mechanisms often reflects prior
experience and is likeliest in countries where legal systems may not be
as well developed and distrust between stakeholders more prevalent.
Respondents see this action as particularly beneficial for Papua New
Guinea, Tanzania, Democratic Republic of Congo and Peru. Effective
dispute resolution mechanisms reduce the risk of escalating
disagreements and help maintain constructive relationships through the
whole life cycle of a mining project.
Stakeholder Views of the Value of Highlighted Actions
Overall % Very or
Extremely helpful
Effective conflict
resolution
Compliance monitoring
and enforcement
Publish relevant
information
Local development
councils
National dialogue
platforms
Rigorous socioeconomic study
Country
Training & development
programs
Global good practice
Exhibit 6: Stakeholder responses of perceived relevance of suggested actions per country
Tanzania
Papua New Guinea
Mongolia
Democratic Republic
of the Congo
India
China
Peru
Canada
Colombia
Guinea
Indonesia
Argentina
Ghana
Brazil
South Africa
United States
Russia
Chile
Australia
Botswana
Kazakhstan
Legend
Percentage of respondents stating that discussed action is very or extremely helpful to advance
responsible mineral development in their country of interest
<50
50-60
60-70
70-80
80-90
>90
Responsible Mineral Development Initiative 2011
25
Chapter 4: The Use of Mineral
Development Agreements
The Responsible Mineral Development Initiative began with an emphasis
on the Mineral Development Agreements (MDAs) often used in
developing countries, but quickly broadened its scope to address
conditions in all countries. It was recognized that the issues and
challenges identified in Phase I of the RMDI occur in all sorts of countries
and under a variety of legal and regulatory regimes. These different
regimes, as well as differences in cultural and historical traditions, can
play an important part in defining both challenges and the most
appropriate response.
MDAs present unique challenges. The need to use them arises most
where significant constraints exist on the ability of host country
governments to manage their mining sectors in an efficient and
accountable way. Many stakeholders thought that the use of MDAs
could be better, and should where possible give way to generally
applicable legal and regulatory structures.
A good, stable, well-developed legal and regulatory system is a
significant step in the direction of an attractive, sustainable investment
and development environment. But even the best mining legislation has
to be backed by honest, efficient policing and an effective court system
if its intentions are to be fulfilled. Factors that can lead to an investor
demanding the use of an MDA before making a significant investment in
a county can include:
• An underdeveloped or highly volatile legal and regulatory regime
governing mineral development, taxes and royalties, capital flows,
employment, imports and exports, and other relevant issues
• Inadequate capacity and experience of government officials at the
national, regional and local levels
• Widespread corruption and the absence of the rule of law
• An underdeveloped or corrupt judicial system that cannot be relied
upon to fairly and effectively resolve disputes
Because of these concerns, MDAs are used in many countries. Our
research shows they are in use in 23 out of 30 major mining countries
[Exhibit 7].
We can differentiate MDAs in terms of their scope:
• Simple: focus on financial and fiscal terms only
• More complex: in addition to financial and fiscal terms,
encompassing broader development aspects, such as local
community obligations, environmental provisions, and health and
safety provisions
Exhibit 7: Use of Mineral Development Agreements in major mining
economies5
MDAs not used
MDAs in use
Simple versions
More complex versions
Australia
Argentina
Angola
Brazil
Azerbaijan
Democratic Republic of the Congo
Canada
Bolivia
Ghana
Indonesia
Botswana
Guinea
Russian Federation
Chile
Kazakhstan
South Africa
China
Laos
United States
Colombia
Mongolia
India
Pakistan
Kyrgyz Republic
Papua New Guinea
Mexico
Philippines
Namibia
Tanzania
6
Peru
26
Responsible Mineral Development Initiative 2011
Phase I of the RMDI identified a number of limitations in current
agreements. Many stakeholders, including industry representatives,
expressed concerns about asymmetrical bargaining power. Others cited
an absence of transparency and the risk that some groups might feel
excluded, with both negotiation processes and final agreements difficult
to access. This in turn creates the worry expressed by stakeholders at
sub-national and community levels who felt excluded from the
negotiation of key provisions that affect them directly.
Representatives of both industry and civil society also commented that
many MDAs attempt to address too many complex topics too early in
the process, before there is a sufficient and shared understanding of
potential benefits, costs, impacts and issues. Industry representatives
expressed frustration over attempts to reopen or axe agreements
occurring after companies had already invested heavily in a project.
At the same time, many stakeholders believe that MDAs have untapped
potential. They can clearly define the rights, roles and responsibilities of
all stakeholders, thereby promoting constructive long-term relationships
and consensus on a project’s contributions to local social and economic
development. They could also be vehicles for implementing the types of
processes outlined in this report.
There is a case for keeping MDAs simple. They can supply the stability
guarantees that companies need before making a major capital
investment, and define the roles and responsibilities of the key
stakeholders. Partnerships and agreements between smaller groups of
actors can complement formal MDA structures. There is no single ideal
model MDA. The best structure is likely to vary from country to country,
and community to community, responding to individual circumstances
according to domestic legislation, public sector capacity, the population
affected and other local conditions.
We hope that the framework in this report can help provide a stable
platform on which to build an MDA where needed. The highlighted
actions can help make the entire negotiation and development process
more collaborative and effective, thereby creating the trust necessary to
build lasting relationships. They can be applied in a variety of national
and local contexts, facilitate finding common ground among affected
stakeholders, and help parties to react effectively and constructively to
changing circumstances and an evolving world.
In time, the aim must be to create national environments that are
transparent, inclusive and trusting. Given this context, a country can
hope to develop a stable, well-developed legal and regulatory system
and investment climate. Where this applies, investors may be less likely
to see MDAs as necessary to securing their interests. Our hope is that
the recommendations and actions highlighted in this report can help to
advance countries and communities towards that transparent, inclusive
and trusting environment.
Based on publicly available information and stakeholder consultation.
5
Before the new law in 2009, a Contract of Work (CoW) system was used. Historically signed CoWs
are still recognized until expiry. The new mining system does not use the old system of contracts;
instead mining business licenses are issued.
6
Chapter 5: Considerations Going Forward
Following extensive stakeholder consultations, research, our survey, and
further analysis, we believe that consideration of our six building blocks
can create a basis for advancing responsible mineral development.
The complexity of the sector and huge variety of contexts in which it
operates mean that not all ideas are applicable in all cases. But we hope
that our building blocks and their corresponding actions, cases studies
and initiatives will help those looking to further unlock the potential of
mineral development.
Partnership, collaboration and the mutual trust that underpins them are
at the heart of any responsible mineral development. Upfront, open and
informed discussions among stakeholders will clear the path for a
smoother, more stable development process, resulting in lower risk for
mining companies and greater socio-economic benefits for countries
and local communities.
Each stakeholder group inevitably has different needs and priorities. But
the importance and value of building trust applies across the board.
Trust is essential from the start of the process. It is difficult to build
retrospectively, and once lost it is very hard to recapture.
NGOs can grasp the opportunity to play a full and active part in the
partnerships and forums that will direct local development. Their
expertise can be essential to the success of the process, and is
deployed most effectively in partnership with other stakeholders. By
engaging constructively, they can connect companies and communities.
Their unmatched local knowledge can be used to ensure that
companies and governments fully understand and respond to the needs
and concerns of affected regions and their people. Where needed, they
can also play a facilitator role between local communities, industry and
government.
Mining can transform the lives of millions of the world’s poorest people.
But this will only be achieved through stable, responsible developments.
Hopefully this report will provide a useful source for those who wish to
turn the challenges and conflicts that so often beset large-scale mineral
developments, into unmatched opportunities for social and economic
growth.
Companies should ensure that sufficient resources are focused on
stakeholder engagement and developing a proper understanding of
host communities. They should also use their experience and capacity
to identify and tackle possible obstacles to progress early in the
process. Effective early engagement with communities, addressing
concerns and providing support to governments where appropriate, will
yield considerable stability benefits.
Company performance on responsible development varies
considerably. Some are taking part in worthwhile experimental “on the
ground” projects. Others are lagging behind. One lesson all can learn is
the value of exchanging good practice and experience – distant or
apparently very different regions may offer parallel challenges and
innovative answers to them. Companies as a whole can raise their
game. Those with a strong commitment to, and track record in,
responsibility need to push forward. Others who are lagging should
learn from the examples of the leaders and seek to close the gap. This
can be demanding for small companies with limited resources – often
those involved in the early stages of development, which may mean that
projects start poorly – but problems are certainly not confined to them.
What every company, irrespective of size, should remember is that a
reputation for responsible development is an increasingly valuable asset,
and can be an investment for future development.
Policy-makers should aim for the robust regulation that establishes
stability, encourages investment and ensures responsible development.
They need to identify gaps in their capacity and seek expert advice on
how to close them. They have to make the best possible use of the tools
and partnerships available to them at local, regional and international
levels to build capacity and improve their understanding of the mining
process. Particularly where regulation is lacking, governments should
consider the immense benefits that come from improving transparency,
both for their own populations and internationally.
Responsible Mineral Development Initiative 2011
27
Appendix
A) Country Segmentation: Taking a
Differentiated Look at Mining Countries
To assist stakeholders in understanding the potential of responsible
mineral development in different countries, and to reduce the broad
generalizations inevitable when discussing these countries as a whole,
30 mining economies were examined in terms of both unexploited
mineral resources and current socio-economic development. The
analysis identifies the countries with the greatest potential for
transformation through a more responsible approach to unlocking their
mineral development potential and socio-economic development
opportunities.
Our analysis defined three broad categories of countries [Exhibit 8] and
[Exhibit 9].
Eleven countries classified as Tier 3 have only moderate potential for
transformation, for example Argentina, Australia, Canada and the United
States. This is because they have limited mineral growth potential,
already advanced socio-economic development or both.
Ten countries classified as Tier 2 have high potential for transformation,
for example Brazil, Chile and Indonesia. They have high or medium
mineral growth potential and may yet go through significant socioeconomic development.
The highest potential for transformation is found in a group of nine
countries, classified as Tier 1, for example Angola, Botswana, Guinea,
Mongolia and Peru. Mining is present to varying degrees in these
countries, but the current level of extraction is low compared to the
potential indicated by the resource value in the ground.
Exhibit 8: Country segmentation
Human development index (2009)
Country segmentation clustered by potential for mining sector growth and potential for socio-economic development
Tier 1
Australia
High
(> 0.75)
0.75
Tier 2
United States
Argentina
China
Namibia
Brazil Mexico
Colombia
Philippines
Bolivia
South Africa Botswana
Angola
Ghana
Low
(< 0.5)
Mongolia
Laos
India
Pakistan
0.5
Peru
Kazakhstan
Indonesia
Kyrgyz Republic
Tier 3
Chile
Russian Federation
Azerbaijan
Medium
(0.5–0.75)
Canada
Tanzania
Papua New Guinea
Guinea
Mineral resource
value
> US$ 5,000 B
DRC
Low
(< 100)
100
Medium
(100–500)
500
< US$ 100 B
High
(> 500)
Country’s resource value divided by annual GDP contribution of mining industry (2009)
1. United Nation’s Human Development Index is a composite index including per capita GDP, life expectancy, adult literacy rates and enrollment in educational institutions.
2. Resource value of estimated resources in the ground at current market prices (five-year average commodity price between 2006-2010) divided mining industry contribution to the country’s GDP in 2009.
See also methodology below.
Source: RMG, USGS, EIU, UNDP
Note 1: Only considered top 30 mining countries in terms of mining revenues in 2009.
Note 2: For calculations of the multiplier the resources considered were bauxite, copper, diamond, gold, iron ore, nickel, PGMs, silver, tin, zinc and coal.
28
Responsible Mineral Development Initiative 2011
Appendix
Exhibit 9 : List of Country Tiers
Segmentation Methodology
Tier 1 countries
Tier 2 countries
Tier 3 countries
Angola
Brazil
Argentina
Bolivia
Chile
Australia
Botswana
Ghana
Azerbaijan
Democratic Republic
of the Congo
India
Canada
Guinea
Indonesia
China
Mongolia
Kazakhstan
Colombia
Peru
Laos
Kyrgyz Republic
South Africa
Mexico
Namibia
Tanzania
Papua New Guinea
Pakistan
Russian Federation
Philippines
Russia
United States
Note: Only the top 30 mining countries in terms of mining revenues in 2009 were considered.
We estimated that these nine Tier 1 countries hold 28% of the total value
of resources of the 30 leading mining countries. Yet they attracted only
12% of mining-related foreign direct investment (FDI) in 2009 [Exhibit 10].
This disproportionately low investment may reflect reluctance either from
governments or civil society to welcome companies into their country, or
from investors deterred by high-perceived risk and severe challenges in
these countries.
Exhibit 10: Mining related FDI
% 100
Axis 1: Approach to analysing a country’s mining potential
There are a variety of ways to consider or define the mining potential of a
country. Many factors influence the exploration interest for a company,
including geology and resources, existing infrastructure, political
stability, mineral policies, technical feasibility and past experience. These
factors are fluid and subject to both gradual development and sudden
change resulting from new geological data or discoveries, political
changes, improvements in technology or commodity price fluctuations.
We looked at the most fundamental factor, geological data, specifically
the estimated available resource value in the ground. By comparing this
resource value with the existing size of the country’s mining industry,
measured by the current mining contribution to GDP, we built a multiplier
indicating a country’s future mining potential.
The countries with the highest multiplier – and thus the greatest potential
benefits – have large unexploited resources and, as yet, a relatively small
mining industry. Those with limited resources or a mature industry have
a lower multiplier and less potential. The multiplier helps to distinguish:
• Countries with large resources, already under considerable
development
• Countries with large resources but comparatively less-developed, or
with high potential to extend mining operations
12
28
80
60
17
28
40
71
44
20
0
The analysis leading to our country segmentation was based on two
axes: future mining potential and current socio-economic development.
We detail our approach below.
Share of total resource
value of 30 mining
countries
Tier 1
Tier 2
Share of FDI into
mining industry in
2009
Tier 3
Source: UNCTAD; Investment Trade Centre
Note: Based on FDI flow data in 2009 or nearest available year
We hope that our proposed framework of six building blocks and
suggested actions, by enhancing trust among stakeholders and
promoting a stable basis for sustainable mineral development, may
unlock potential for growth, particularly in Tier 1 countries.
Responsible Mineral Development Initiative 2011
29
Appendix
Resource value data compilation
We acknowledge the limits of comprehensive resource data on a
country-by-country basis. Our analysis aims to provide an interesting
and helpful fresh view of the industry, rather than a conclusive,
categorical segmentation. Furthermore, we have limited our approach
on looking at the gross value of mineral resources only. A more
comprehensive analysis could incorporate other influential factors, such
as production costs or available infrastructure.
Available geological data is often linked to current or planned mining
projects, which can lead to the full potential of some countries being
underestimated. This is most likely where the industry has still to fully
emerge. New geological data would therefore increase the mining
potential of those countries.
Our approach to estimating a country’s mining potential:
• We limited our analysis on the following main minerals: bauxite,
copper, diamond, gold, iron ore, nickel, platinum, palladium and
other precious metals (PGMs), silver, tin, zinc and coal.
• We used a variety of complementary data sources to estimate the
available volume of ore resource in the ground. The main sources
were: Raw Minerals Group, Geoscience Australia, Indian Bureau of
Mines, Brazilian Mining Institute, United States Geological Survey
(USGS) and United States Department of State.
• In some cases where data was limited or absent, we estimated the
missing figures – partly based on available reserve data, partly on
available global resource estimates from USGS, combined with
sources stating country percentages of global reserves.
• The ore resource volume was then multiplied by an ore-tocommodity ratio for each resource type to obtain the overall
commodity volume in the ground.
• Finally, the commodity tonnage was multiplied by an average
commodity spot price (2006-2010), resulting in an approximated
value for each country’s resource base.
Mining contribution to GDP data compilation
The percentage contribution of mining to GDP was calculated using
World Bank 2009 GDP figures for each country, and a combination of
2009 USGS and African Economic Outlook data for the percentage
relating to mining (excluding oil and gas).
30
Responsible Mineral Development Initiative 2011
Axis 2: Approach to analysing a country’s socio-economic
development
Mineral development has the greatest potential to transform those
countries that are still less well developed. To differentiate among the
countries’ development levels we sought an indicator with a sufficiently
complete data set expressing a broader socio-economic development.
The United Nations’ Human Development Index (HDI) is a composite
indicator including not only the economic indicator GDP, but also
measures such as life expectancy, adult literacy and enrolment in
educational institutions.
• In countries with a low current HDI rating there is real potential to
unlock not only mineral resources, but also socio-economic
development.
• In these countries, mining could make a substantial and meaningful
impact on social/human development.
For our analysis, we consider countries that score below 0.5 to have
relatively low development. Those between 0.5 and 0.75 are rated
medium and those above 0.75 as highly developed.
The data and key sources used for the country segmentation analysis
are summarized in Exhibit 11.
Exhibit 11: Data and main sources used for country segmentation
Data (year)
Main Sources
Gross Domestic Product (current US$) •
by country (2009)
The World Bank
Contribution of mining and quarrying
industry to country’s GDP (2009)
•
•
USGS
African Economic Outlook (for
African countries)
Country’s resource value
•
Resource volume: Raw Materials
Group, AME Iron Ore Resource
Data, USGS, US Library of
Congress, Government data
Ore to commodity ratio: Raw
Materials Group
Prices: Datastream, Platts, SBB
Steel Prices
•
Identified ore resources in the
ground (2009)
Ore to commodity ratio (2009)
Commodity prices (average
2006-2010)
•
Human Development Index (2009)
•
•
•
•
United Nations Development
Programme (UNDP)
Appendix
B) Overview of Stakeholder Consultations
This research is the culmination of Phase II of the World Economic
Forum’s Responsible Mineral Development Initiative, launched in 2009.
The work conducted for this report in 2011, with the support of The
Boston Consulting Group (BCG), has involved extensive consultation
with mining industry stakeholders across the world to understand the
challenges faced in the pursuit of responsible mining, and to propose
practical actions to overcome them.
Europe
• United Kingdom, International Council on Mining and Metals
meetings, March and October 2011
• United Kingdom, World Economic Forum Mining & Metals Strategy
Meeting, November 2011
• Switzerland, RMDI workshop at Intergovernmental Forum on
Mining/Minerals/Metals and Sustainable Development (IGF),
November 2011
Our approach has involved the sourcing of ideas from an extensive
range of stakeholder groups, expert interviews, workshops, and using
BCG resources.
North America
Through continued stakeholder discussion six building blocks were
judged to be most relevant, and reviewed by the RMDI Advisory Group.
Eight actions were identified as practical and effective examples of how
these building blocks could be implemented.
South America
Stakeholder consultations (meetings, workshops and country-specific
interviews) throughout the last two years are grouped by region:
Africa
• United States, RMDI workshop in collaboration with the World Bank,
December 2011
• Columbia, country-specific interviews, 2010
• Peru, country-specific interviews, 2010
• Chile, country-specific interviews, 2010
• Brazil, country-specific interviews, 2010
• Brazil, World Economic Forum on Latin America, April 2011
• Peru, RMDI workshop on Peru, December 2011
• Liberia, country-specific interviews, 2010
• Ghana, country-specific interviews, 2010
• South Africa, country-specific interviews, 2010
• Tanzania, country-specific interviews, 2010
• South Africa, RMDI workshop, February 2011
• South Africa, World Economic Forum on Africa, May 2011
Asia
• Mongolia, RMDI roundtable, June 2010
• India, India Economic Summit, November 2010
• United Arab Emirates, World Economic Forum Annual Global
Agenda Council meeting, November 2010
• Mongolia, country-specific interviews, 2010
• Lao PDR, country-specific interviews, 2010
• Mongolia, RMDI workshop, March 2011
• Indonesia, World Economic Forum on East Asia, June 2011
• United Arab Emirates, World Economic Forum Annual Global
Agenda Council meeting, October 2011
• Indonesia, EITI Board meeting, November 2011
• Indonesia, World Bank on Transparency Norms, November 2011
Australasia
• Australia, country-specific interviews, 2010
• Papua New Guinea, country-specific interviews, 2010
• Australia, Sustainable Development Conference, October 2011
Responsible Mineral Development Initiative 2011
31
Appendix
C) Acknowledgements
The World Economic Forum thanks the members of the Mining and
Metals Steering Board, the RMDI Advisory Group and the Global
Agenda Council on the Future of Mining & Metals for their contributions:
World Economic Forum Mining and Metals Steering Board
• Richard O’Brien,* President and Chief Executive Officer, Newmont
Mining Corporation, USA (Chair)
• Tom Albanese, Chief Executive, Rio Tinto, United Kingdom
• Cynthia Carroll, Chief Executive, Anglo American, United Kingdom
• Patrice Motsepe, Founder and Executive Chairman, African
Rainbow Minerals, South Africa
• Klaus Kleinfeld, Chairman and Chief Executive Officer, Alcoa, USA
• Ivan Glasenberg, Chief Executive Officer, Glencore International,
Switzerland
*Also a member of the RMDI Advisory Group
RMDI Advisory Group
• Britt D. Banks,* Adjunct Professor, School of Law, University of
Colorado, USA (Chair)
• Clive A. Armstrong, Lead Economist, World Bank Group, USA
• Beatriz Boza Dibos, Executive Manager, Ciudadanos al Día, Peru
• Stephen D’Esposito,* President, RESOLVE, USA
• R. Anthony Hodge, President, International Council on Mining and
Metals (ICMM), United Kingdom
• Huguette Labelle,* Chair, Transparency International, Germany
• Richard O’Brien, President and Chief Executive Officer, Newmont
Mining Corporation, USA
• Antonio A.M. Pedro,* Director, Sub-regional Office for Eastern Africa
(SRO-EA), United Nations Economic Commission for Africa
(UNECA), Rwanda
• Puntsag Tsagaan, Legal Policy and Mineral Resource Policy Senior
Adviser to the President of Mongolia, Office of the President of
Mongolia, Mongolia
• David Williams, Regional Director, Latin America and the Caribbean,
TechnoServe, USA
* Also a Member of the Global Agenda Council on the Future of Mining & Metals.
32
Responsible Mineral Development Initiative 2011
Global Agenda Council on the Future of Mining & Metals
• Anthony Andrews, Former Executive Director, Prospectors &
Developers Association of Canada (PDAC), Canada (Chair)
• Joyce Rosalind Aryee, Chief Executive Officer, Ghana Chamber of
Mines, Ghana
• Jorge Bande, Member of the Board, Corporación Nacional del
Cobre de Chile (CODELCO), Chile
• Marketa D. Evans, Counsellor, Corporate Social Responsibility
(CSR), Extractive Sector, Foreign Affairs and International Trade
Canada, Canada
• Charmian Gooch, Co-Founder and Co-Director, Global Witness,
United Kingdom
• Anna Littleboy, Operations Deputy Director, Minerals Down Under
National Research Flagship, Commonwealth Science and Industry
Research Organisation, Australia,
• Kathryn McPhail, Principal, International Council on Mining and
Metals (ICMM), United Kingdom
• Maria Ligia Noronha, Senior Fellow and Director, Resources and
Global Security Division, Energy and Resources Institute (TERI),
India
• Paulo Camillo Penna, President, Brazilian Mining Association
(IBRAM), Brazil
• William Scotting, Executive Vice-President and Head, Strategy,
ArcelorMittal, United Kingdom
• Shen Lei, Professor, Institute of Geographical Sciences and Natural
Resources Research, CAS, People’s Republic of China
• Michael H. Solomon, Chairman, Mineral Economics Committee,
South African Institute of Mining and Metallurgy, South Africa
• Liliang Teng, Chief Marketing Officer and Managing Director,
Southern Africa Investment Department, China-Africa Development
Fund, People’s Republic of China
Appendix
Participants of our meetings and workshop
on the Responsible Mineral Development
Initiative in 2011
Responsible Mineral Development Initiative,
South Africa, February 2011
• Tito Mboweni, AngloGold Ashanti Ltd,
South Africa
• Zandie Mlambo, AngloGold Ashanti Ltd,
South Africa
• Greg Hull, Australian Trade Commission
(AUSTRADE), South Africa
• France Bourgouin, Danish Institute for
International Studies (DIIS), Denmark
• Andrew Mackenzie, International Council
on Mining and Metals (ICMM), United
Kingdom
• Robin Weisman, International Finance
Corporation (IFC), USA
• Heinz Pley, McKinsey & Company, South
Africa
• Lois M. Hooge, Ministry of Natural
Resources of Canada, South Africa
• Gerald Padmore, Newmont International
Services Limited, USA
• Anthony Andrews, Prospectors &
Developers Association of Canada (PDAC),
Canada
• Claude Kabemba, Southern Africa
Resource Watch, South Africa
• Paul Kapelus, Synergy Global Consulting
Ltd, South Africa
• Edward O’Keefe, Synergy Global
Consulting Ltd, United Kingdom
• Joyce Rosalind Aryee, The Ghana
Chamber of Mines, Ghana
• Michael H. Solomon, Wesizwe Platinum
Ltd, South Africa
• Jonathan Hobbs, WWF - World Wide Fund
for Nature - Tanzania, TanzaniaResponsible
Mineral Development Initiative, Mongolia,
March 2011
• Doug Krahn, Centerra Gold Mongolia LLC,
Mongolia
• Dash Oyunchimeg, Customs General
Administration, Mongolia
• Stefan Hanselmann, Deutsche
Gesellschaft für Technische
Zusammenarbeit (GTZ), Mongolia
• Sosorjav M., Ministry of Mineral Resources
and Energy of Mongolia, Mongolia
• Artem Volynets, EN+ Group Russia, Russia
• Tsogtbaatar Ch., Ministry of Mineral
Resources and Energy of Mongolia,
Mongolia
• Andrey Churin, EN+Group Russia, Russian
Federation
• Otgonbat Sedbazar, Ministry of Minerals
and Energy of Mongolia, Mongolia
• Sugarmaa Zaankhuu, Energy Resources
LLC, Mongolia
• Dashdorj Zorigt, Ministry of Minerals and
Energy of Mongolia, Mongolia
• Tserenkhand Gurbaram, Energy
Resources LLC, Mongolia
• Enkhbat A., Ministry of Nature,
Environment and Tourism of Mongolia,
Mongolia
• Batbileg Batbayar, Erdenes MGL LLC,
Mongolia
• Bilgee Tumur, Erdenes MGL LLC, Mongolia
• Gankhuyag Battulga, Erdenes MGL LLC,
Mongolia
• Ganzorig Temuulen, Erdenes MGL LLC,
Mongolia
• Maral Baterdene, Erdenes MGL LLC,
Mongolia
• Tsenguun Tsogt, Erdenes MGL LLC,
Mongolia
• Ivshin Idesh, Erdenet Mining Corporation
(EMC), Mongolia
• Enebish Baasangombo, Executive Director
Erdenes MGL LLC, Mongolia
• Delgermaa B., Extractive Industries
Transparency Initiative (EITI), Mongolia
• Dambadarjaa Jargalsaikhan, Freelance
Economist, Mongolia
• John P. Finigan, Golomt Bank, Mongolia
• Chuluunbaatar Enkhzaya, Independent
Consultant and Researcher, Mongolia
• Tsend-Ayush D., Independent Authority
against Corruption, Mongolia
• Kathryn Mcphail, International Council on
Mining and Metals (ICMM), United
Kingdom
• Turbat D., MIH Group LLC, Mongolia
• Gansukh Luimed, Ministry of Environment
of Mongolia, Mongolia
Responsible Mineral Development Initiative,
Mongolia, March 2011
• Bazarsuren Batjargal, Ministry of Finance
of Mongolia, Mongolia
• Hurts Choijin, “Mongol 999”
NationalConsortium, Mongolia
• Chuluun Gankhuyag, Ministry of Finance of
Mongolia, Mongolia
• Idevkhten Doloonjin, Ambassy of Mongolia,
Russian Federation
• Oyunbaatar U., Ministry of Mineral
Resources and Energy of Mongolia,
Mongolia
• Myagmardash S., Ministry of Finance of
Mongolia, Mongolia
• Orgil Luvsantseren, Embassy of Mongolia,
Switzerland
• Bayartsogt Sangajav, Ministry of Finance of
Mongolia, Mongolia
• Ronald Verstappen, ArcelorMittal, United
Kingdom
• Bayarbat S., Ministry of Mineral Resources
• and Energy of Mongolia, Mongolia
• Brian Fisher, Business and Applied
Economics Pty, Australia
• Erdembileg J., Ministry of Mineral
Resources and Energy of Mongolia,
Mongolia
• Davaatsedev L., Mongol Coal Association,
Mongolia
• Naran T. Executive Director Mongol Coal
Association Mongolia, Mongol Coal
Association , Mongolia
• Chinggis T., Mongolian Development
Resources Centre, Mongolia
• Galsandorj D., Mongolian Exporters Union,
Mongolia
• Damba Damjin, Mongolian National Mining
Association, Mongolia
• Jargalsaikhan Bazarsad, Mongolian
Republican Party, Mongolia
• Chinzorig Bavuu, Mongolian University of
Science and Technology, Mongolia
• Bold P., My Motherland Movement,
Mongolia
• Khashchuluun Ch., National Development
and Innovation Committee, Mongolia
• Tseren Davaadorj, Office of the National
• Security Council of Mongolia, Mongolia
• Otgochuluu Ch., Office of the President of
Mongolia; Economic
• Policy and Competitiveness Research
Centre, Mongolia
• Puntsag Tsagaan, Office of the President of
Mongolia, Mongolia
• Purevsuren Lundeg, Office of the President
of Mongolia, Mongolia
• Tsakhia Elbegdorj, Office of the President
of Mongolia, Mongolia
• Sukhbaatar Batbold, Office of the Prime
Minister of Mongolia, Mongolia
• Chad Blewitt, Oyu Tolgoi LLC, Mongolia
• Sukhgerel Dugersuren, Oyu Tolgoi Watch,
Mongolia
• Badamsuren Kh., Parliament of Mongolia,
Mongolia
• Batsuuri Ya. Member of Parliament,
Mongolia, Parliament of Mongolia,
Mongolia
• Enkhbold Z., Parliament of Mongolia,
Mongolia
Responsible Mineral Development Initiative 2011
33
Appendix
• Odkhuu D., Parliament of Mongolia,
Mongolia
• Maria Glicia de Nobrega Coutinho, CPRM
- Geological Services of Brazil, Brazil
• Sanjaasuren Oyun, Parliament of Mongolia,
Mongolia
• Julio Fernandes Lima, CPRM - Geological
Services of Brail, Brazil
• Arshad Sayed, Peabody Energy Mongolia
and India, Mongolia
• Fatima Maria do Nascimento, CPRM Geological Services of Brazil, Brazil
• Arvinbayar Baatar, Responsible Mining
Initiative for Sustainable Development
(RMI), Mongolia
• Marcelo De Andrade, Earth Capital
Partners LLP, United Kingdom
• Baigal Lkhagvasuren, Responsible Mining
Initiative for Sustainable Development
• (RMI), Mongolia Batsaikhan G.,
Responsible Mining Initiative for
Sustainable Development (RMI), Mongolia
• Dolgormaa l., Responsible Mining Initiative
for Sustainable Development (RMI),
Mongolia
• John Williams, Global Organization of
Parliamentarians Against Corruption
(GOPAC), Canada
• Paolo M. Martelli, International Finance
Corporation (IFC), USA
• Orlando Lima, Janus Sustainability
Consulting, Brazil
• Dominic Channer, Kinross Gold
Corporation Ecuador, Ecuador
• Annette Goldhausen, Rio Tinto, United
Kingdom
• Jay Schnyder, MKS Finance SA,
Switzerland
• Laurel Green, Rio Tinto, United Kingdom
• Neville Tiffen, Rio Tinto, Australia
• Stephen P. Gottesfeld, Newmont Mining
Corporation, USA
• Baigalmaa Purevsuren, Rio Tinto Mongolia,
Mongolia
• Anne-Lene Midseim, Norsk Hydro Brasil
Ltda, Brazil
• David Paterson, Rio Tinto Mongolia,
Mongolia
• Hernan Morano, Skanska, Argentina
• Howard Chu, Teck Resources Limited,
People’s Republic of China
• Douglas H. Horswill, Teck Resources
Limited, Canada
• Josh Friedman, The Asia Foundation,
Mongolia
• Delia Ferreira Rubio, Transparency
International, Argentina
• Jim Dwyer, The Business Council of
Mongolia, Mongolia
• Cristian Rodriguez Salas, Universidad
Catolica del Norte, Chile
• lkhagvasuren O., The World Bank,
Mongolia
• Britt D. Banks, University of Colorado, USA
• Oyunbileg Baasanjav, The World Bank,
Mongolia
• Orkhon Onon, Trade and Development
Bank, Mongolia
• David Williams, TechnoServe, USA
• Silvio Vaz de Almeida, Vale Foundation,
Brazil
• Andreia Rabetim, Vale Foundation, Brazil
• Phumzile Magagula-Thobokwe,
Information and Research Services,
Botswana National Productivity Centre,
Botswana
• Esperança Bias, Ministry of Mineral
Resources and Energy of Mozambique,
Mozambique
• Fatima Momade, Ministry of Mineral
Resources and Energy of Mozambique,
Mozambique
• Alexandre Barro Chambrier, Ministry of
Mines, Oil, Hydrocarbons, Energy and
Hydraulic Resources of Gabon, Gabon
• Francis Mayaga-Mikolo, Ministry of Mines,
Petroleum, Oil, Energy, Water Resources
and the Promotion of New Energies,
Gabon
• Hanna Tetteh, Ministry of Trade and
Industry of Ghana, Ghana
• Jay Schnyder, MKS Finance SA,
Switzerland
• Chris Anderson, Newmont Ghana Gold
Ltd, Ghana
• Gerald Padmore, Newmont International
Services Limited, USA
• Gezahegn Kebede, Plan International,
Kenya
• Adrien Monsengo, Rio Tinto Alcan, South
Africa
• Jean Chawapiwa, Rio Tinto Management
Services SA (Pty) Ltd, South Africa
• Steve Phiri, Royal Bafokeng Platinum,
South Africa
• Siyabonga Ndabezitha, South African
Department of Mining Resources, South
Africa
• Celso R. Fernandes Jr., World Vision
Internatonal Brazil, Brazil
• Claude Kabemba, Southern Africa
Resource Watch, South Africa
Responsible Mineral Development Initiative in
Africa, South Africa, May 2011
• Paul Kapelus, Synergy Global Consulting
Ltd, South Africa
• Dan Simelane, African Rainbow Minerals
Ltd (ARM), South Africa
• Bruce McNamer, TechnoServe Inc., USA
• João Menezes, Alcoa, Brazil
• Walter de Simoni, Anglo American Group,
Brazil
• Greg Hull, Australian Trade Commission
(AUSTRADE), South Africa
• Jose Margalith, Anglogold Ashanti Ltd,
Brazil
• Martyn Davies, Frontier Advisory, South
Africa
• Carlos Bertoni, Aura Minerals Inc., Canada
• Rinaldo Mancin, Brazilian Mining
Association (IBRAM), Brazil
• Francis G. Antonie, Graduate School of
Public and Development Management,
South Africa
• Paulo Camillo Penna, Brazilian Mining
Association (IBRAM), Brazil
• Jane Nelson, Harvard Kennedy School,
USA
• Karla Monteiro Matos, Center for Applied
Sustainability, Brazil
• Paul Hollesen, ICMM Resource
Endowment Initiative, South Africa
Responsible Mineral Development Initiative in
Latin America, Brazil, April 2011
• Marcelo Lomelino, Alcoa, Brazil
• Diego Hernandez, Corporación Nacional
del Cobre de Chile (CODELCO), Chile
34
Responsible Mineral Development Initiative 2011
• Sean M. Cleary, Strategic Concepts (Pty)
Ltd, South Africa
• Benedikt Sobotka, The Boston Consulting
Group, Germany
• Joyce Aryee, The Ghana Chamber of
Mines, Ghana
• John Cruise, The Southern African Institute
of Mining and Metallurgy (SAIMM), South
Africa
• Julie Dixon, The Southern African Institute
of Mining and Metallurgy (SAIMM), South
Africa
• Gys Landman, The Southern African
Institute of Mining and Metallurgy (SAIMM),
Sout Africa
• Michael H. Solomon, The Southern African
Institute of Mining and Metallurgy (SAIMM),
South Africa
Appendix
• Paul Masanja, TMAA - Tanzania Minerals
Audit Agency, Tanzania
• Richard O’Brien, Newmont Mining
Corporation, USA
• Manuel Alberto Nunez Cedeno, Direccion
Nacional de Recursos Minerales, Panama
• Neville D’Souza, Trimex International FZE,
United Arab Emirates
• Sinta Sirait, PT Freeport Indonesia
Company, Indonesia
• Lalalison Razafintsalama, Ex Laboratoire
des Mines, Madagascar
• Wilfred C. Lombe, United Nations
Economic Commission for Africa (UNECA),
Ethiopia
• Tony Wenas, PT International Nickel
Indonesia (PT Inco), Indonesia
• Jurgen Reitmaier, Extractive Industries
Transparency Initiative, Germany
• Febrina Danuningrat, PT Tekno Orbit
Persada, Indonesia
• Robert Schafer, Hunter Dickinson Inc,
Canada
• Ridaya Laodengkowe, Publish What You
Pay, Indonesia
• Bill Singleton, IGF Secretariat, Canada
• Ronald Denom, SNC-Lavalin International,
Canada
• Ben Peachey, International Council on
Mining & Metals, United Kingdom
• Bob Parsons, Southern Arc Minerals Inc.,
Canada
• Takahiro Hagiwara, Japan Oil, Gas, &
Metals National Corporation, United
Kingdom
• Mike Morris, University of Cape Town,
South Africa
• David Kaplan, University of Cape Town,
South Africa
• Judith Fessehaie, University of Cape Town,
South Africa
• Peter Leon, Webber Wentzel, South Africa
• John Panze, World Bank, USA
• Marcelo Giugale, World Bank, USA
• Chandra Sekhar Verma, Steel Authority of
India, India
• Eddy Tamboto, The Boston Consulting
Group, Indonesia
Responsible Mineral Development Initiative in
East Asia, Indonesia, June 2011
• Alexander Koch, The Boston Consulting
Group, Singapore
• Hendrik Weiler, ABB Sakti Industri,
Indonesia
• Madhu Koneru, Trimex Group, United Arab
Emirates
• Richard Bale, Embassy of Canada,
Indonesia
• Karlheinz Spitz, ENV Asia Pte Ltd,
Indonesia
• Paul Whincup, Environmental Resources
Management (ERM), Indonesia
• Erry Riyana Hardjapamekas, Extractive
Industries Transparency Initiative (EITI),
Indonesia
• Paul Murphy, Freeport McMoRan Copper
& Gold, USA
• Park Jae-Hong, Hanwha Corporation,
Republic of Korea
• Prasad R. Koneru, Trimex Industries Ltd,
India
• Shonali Choudhry, Trimex International,
Singapore
• Gérald Cadet, IGF Secretariat, Canada
• Jerry Ahadjie, Minerals Commission,
Ghana
• Clinton Thompson, Mines and Geology
Division, Jamaica
• Eduardo Alexandre, Mines Department,
Mozambique
• Emile Kabore, Ministère de Mines, des
Carrières et de l’Energie, Burkina Faso
• Louis Marechal, Ministère français des
affaires étrangères et européennes
• David Brown, World Bank, Indonesia
• Sous-direction de la sécurité aliementaire
et du développement économique, France
• Bardolf Paul, Yayasan Tambuhak Sinta
(YTS), Indonesia
• Octavio Lopez, Ministerio de Industria y
Comercio, Dominican Republic
• Alvaro Ordonez, Ministerio de Recursos
Naturales No Renovables, Ecuador
The Intergovernmental Forum in Mining,
Minerals, Metals and Sustainable
Development, Switzerland, November 2011
• Hayri Murat Fertelli, Ministry of Economy,
Turkey
• John Odida, Ministry of Energy & Mineral
Development, Uganda
• Kim Dong Kwan, Hanwha Group, Republic
of Korea
• Johary Andriamanantena, Bureau du
Cadastre Mines de Madagascar,
Madagascar
• Martiono Hadianto, Indonesian Mining
Association, Indonesia
• James Small, Canada-EU Mining Council,
Canada
• Gidion Kasege, Ministry of Energy and
Minerals, Tanzania
• Ir. Priyo Pribadi Soemarno, Indonesian
Mining Association, Indonesia
• Edward Wang, Canadian Embassy to
Costa Rica, Costa Rica
• Edwin Ngonyani, Ministry of Energy and
Minerals, Tanzania
• Kathryn McPhail, International Council on
Mining and Metals (ICMM), United
Kingdom
• Jean Vavrek, Canadian Institute of Mining,
Metallurgy, and Petroleum, Canada
• Ernesto Bustamante, Ministry of Energy
and Mines, Peru
• Andrew Dawe, Canadian International
Development Agency, Canada
• Moses Masibo, Ministry of Environment
and Mineral Resources, Kenya
• Leonard Kalindekafe, Department
• Max-Olivier Gonnet, Ministry of Foreign
Affairs, France
• Karsten Fuelster, International Finance
Corporation (IFC), Indonesia
• Gita Wirjawan, Investment Coordinating
Board (BKPM), Indonesia
• Ministry of Natural Resources, Energy, and
Environment, Malawi
• Mansur Geiger, Kalimantan Gold
Corporation Limited, Canada
• Danilo U Uykieng, Department of
Environment and Natural Resources,
Philippines
• Richard Taylor, Minerals and Metals Group,
Laos
• Darwin Zahedy Saleh, Ministry of Energy
and Mineral Resources of Indonesia,
Indonesia
• Ganhuyag Chuluun Hutagt, Ministry of
Finance of Mongolia, Mongolia
• Gabriel Data, Ministry of Energy & Mineral
Development, Uganda
• Bayarbat Sangajav, Ministry of Mineral
Resources & Energy, Mongolia
• Carmen Elena Diallo, Ministry of Mines,
Senegal
• Christopher Stamford, Department of
Resources, Energy, and Tourism, Australia
• Rokhaya Samba Diene, Ministry of Mines,
Senegal
• José Francisco Castro Munöz, Direccion
de Geologia y Minas, Costa Rica
• Jackeline Gonçalves De Oliveira, Ministry
of Mines and Energy of Brazil, Brazil
• Aldo Santos, Direccion Ejecutiva de
Fomento a la Mineria, Honduras
• Gebre Egziabher Mekonen Wube, Ministry
of Mines of Ethiopia, Ethiopia
Responsible Mineral Development Initiative 2011
35
Appendix
• Robert Biyela, Ministry of Natural
Resources and Energy, Swaziland
• Thero Setiloane Business Leadership
South Africa, South Africa
• Caroline Rugare Chouraya, Ministry of
Natural Resources and Energy, Swaziland
• James Small, Canada-EU Mining Council
Canada
• Nikolay Miletenko, Ministry of Natural
Resources and Environment, Russian
Federation
• Charles Emmerson Chatham House,
United Kingdom
• Anna Miletenko, Ministry of Natural
Resources and Environment, Russian
Federation
• Elena Savarenskaya, Ministry of Natural
Resources and Environment of the Russian
Federation, Russian Federation
• John Desmond Anderson Waverley,
Consolidated Contractors Company
(CCC), United Kingdom
• Britt D. Banks University of Colorado, USA
• Elizabeth Bastida, University of Dundee,
United Kingdom
• Peter D. Cameron University of Dundee,
United Kingdom
• Alexander Babinsky, Uralkali, Russian
Federation
• Cindy Kroon, World Bank Institute, United
States
• Elena Rollins, EN+Group, Russian
Federation
• Simon Buerk Glencore International AG,
Switzerland
• Irshad Ali Khokhar, Ministry of Petroleum
and Natural Resources, Pakistan
Responsible Mineral Development in Peru,
December 2011
• Charmian Gooch Global Witness, United
Kingdom
• Ismael Ortiz, Mission du Mexique auprès
de l’Organisaton Mondiale de Commerce,
Switzerland
• Almira Cemmel Global Witness, United
Kingdom
• Luis Herrera Rasmussen, Adventist
Development and Relief Agency - ADRA,
Peru
• Patrick Chevalier, Natural Resources
Canada, Canada
• Ginny Flood, Natural Resources Canada,
Canada
• Nurzhan Rakhmetov, Permanent Mission
of the Republic of Kazakhstan to the United
Nations in Geneva, Switzerland
• Ross Gallinger, Prospectors & Developers
Association of Canada, Canada
• Sebastien Winkler, Rosian Montana Gold
Corp., Romania
• Glenn Gemerts, State Mining Company
and Ministry of Natural Resources,
Suriname
• Paul Masanja, Tanzania Minerals Audit
Agency, Tanzania
• Mamadou Barry, The World Bank, USA
• Raphael Kaplinsky Institute of
Development Studies, University of
Sussex, United Kingdom
• Kathryn McPhail International Council on
Mining and Metals (ICMM), United
Kingdom
• Liz Whiteway Lynas Corporation Limited,
Australia
• Diane Lea Johnson MercyCorps, USA
• Robert Marquis, Ministry of Natural
Resources and Wildlife of Quebec, Canada
• Jay Schnyder MKS Finance SA,
Switzerland
• Joe Pollara, Newmont Mining Corporation,
USA
• Alexandr Andrianov PJSC Smart-Holding,
Ukraine
• Alexei Mojarov, UNCTAD, Switzerland
• Pierre Boulanger, Québec Government
Office London
• Catherine Katengola- Lindelof, UNCTAD,
Switzerland
• Magnus J. Ericsson Raw Materials Group,
Sweden
• Claudine Sigam, UNCTAD, Switzerland
• Vicky Bowman Rio Tinto Plc, United
Kingdom
• Andrei Krasnikov, USAID Reforma Project,
Kyrgyz Republic
• Philip A J Nicholas, Vale, Canada
• Edward Bickham, World Gold Council,
United Kingdom
• Terry Heymann, World Gold Council,
United Kingdom
Mining & Metals Strategy Meeting, November
2011
• Imrhan Paruk African Rainbow Minerals Ltd
(ARM), South Africa
• Zandie Mlambo, AngloGold Ashanti, South
Africa
• Roland Verstappen ArcelorMittal, United
Kingdom
• Joe Matthews, ArcelorMittal, United
Kingdom
36
Responsible Mineral Development Initiative 2011
• Mark Davies Rio Tinto Plc, United Kingdom
• Susan Cook Royal Bafokeng Nation, South
Africa
• Jaakko Kooroshy Royal Institute of
International Affairs, United Kingdom
• Vera Kurochkina, RUSAL, Russian
Federation
• Michael H. Solomon South African Institute
of Mining and Metallurgy, South Africa
• Jock Mendoza-Wilson System Capital
Management, Ukraine
• Brent Habig, TechnoServe Inc., , USA
• Philip Krinks The Boston Consulting Group,
United Kingdom
• Lydia Ogilvie, The Boston Consulting
Group, United Kingdom
• Bruce Bodine The Mosaic Company, USA
• Enrique Rodriguez, Anglo American Perú,
Peru
• Gonzalo Quijandria, Barrick Sudamérica,
Peru
• Omar Varillas, CARE Perú, Peru
• Jorge Luis Lafosse Quintana, Cáritas del
Perú, Peru
• Beatriz Boza Dibos, Ciudadanos al Día,
Peru
• Alejandro Hermoza, Compañia de Minas
de Buenaventura, Peru
• Eduardo O. Romero Indacochea,
Compañía Minera Miski Mayo S.R.L, Peru
• Jorge Alberto Quintero, Conciviles, Peru
• Michael Rösch, Deutsche Gesellschaft für
Internationale Zusammenarbeit, Germany
• Antoine Chevrier, Embassy of Canada,
Peru
• Alexandra Laverdure, Embassy of Canada,
Peru
• Sacha Levasseur-Rivard, Embassy of
Canada, Peru
• Jorge Medina Mendez, Ernst & Young,
Peru
• Mario H. Baeza Vásquez, Fluor, Colombia
• Walter Casquino Rey, Geological, Mining
and Metallurgy Institute of Perú, Peru
• Oliver Schramm, German Ambassy of
Peru, Peru
• Diego José Ortega Meneses, Gold Fields
La Cima S.A.A., Peru
• José Luis López Follegatti, Grupo de
Diálogo Minería y Desarrollo Sostenible,
Peru
• Humberto Olaechea, Grupo de Diálogo
Minería y Desarrollo Sostenible, Peru
• Ana Maria Vidal Cobian, Grupo de Diálogo
Minería y Desarrollo Sostenible, Peru
• Elena Espinoza, Institute for Social
Development, Peru
Appendix
• Ricardo Morel, Institute for Social
Development, Peru
Responsible Mineral Development Initiative,
Washington, December 2011
• Miguel Enrique Santillana Santos, Instituto
del Perú, Peru
• Nathan Monash, AngloGold Ashanti
Limited, USA
• Julio Paz Cafferata, IPAE (Accion
Empresarial), Peru
• Simon Jimenez, Barrick Gold Corporation,
Canada
• Milton Alva Villacorta, Milpo SA, Peru
• Darcy Milburn, Human Rights Watch, USA
• Dario Zegarra Macchiavello, Minera
Yanacocha SRL, Peru
• Gilberto Chona, Inter-American
Development Bank, USA
• Luis Miguel Castilla Rubio, Ministry of
Economy and Finance of Peru, Peru
• Andrea Koppel, Mercy Corps , USA
• Carlos Herrera Descalzi, Ministry of Energy
and Mining of Peru, Peru
• Jose Luis Carbajal Briceño, Ministry of
Energy and Mining of Peru, Peru
• Martin Del Alcazar Chavez, Ministry of
Energy and Mining of Peru, Peru
• Stephen P. Gottesfeld, Newmont Mining
Corporation, USA
• Carlos Santa Cruz, Newmont Mining
Corporation, Peru
• Javier Velarde, Newmont Mining
Corporation, Peru
• Alicia Abanto, Office of the Ombudsman of
Peru, Peru
• Daniel Torrealva Dávila, Pontificia
Universidad Catolica del Perú, Peru
• Edgar Pebe, Presidencia del Consejo de
Minostros (PCM), Peru
• Ricardo Labó, Rio Tinto Minera Peru
Limitada, Peru
• Ian Woods, Rio Tinto Minera Peru Limitada,
Peru
• Javier Torres Seoane, Servicios Educativos
Rurales - SER Peru, Peru
• Enrique Valdivia, SNC-Lavalin Peru S.A.,
Peru
• Oscar González Rocha, Southern Copper,
Peru
• Patrick Chevalier, Natural Resources
Canada, Canada
• Nick Cotts, Newmont Ghana Gold Ltd,
Ghana
• Joe Pollara, Newmont Mining Corporation,
USA
• Marco Konings, Pact W, USA
• Antoine Heuty, Revenue Watch Institute,
USA
• Karin Lissakers, Revenue Watch Institute,
USA
• Simon M. Winter, TechnoServe Inc, USA
• Miguel Aldaz, The Inter-American
Development Bank, USA
• Bettina Boekle-Giuffrida, The InterAmerican Development Bank, USA
• Abraham Morris Fox, The Inter-American
Development Bank, USA
• Michael C. Stanley, The World Bank, USA
• Clive A. Armstrong, The World Bank
Group, USA
• Adrian Fozzard, The World Bank Group,
USA
• Michael D. Jarvis, The World Bank Institute,
USA
• Britt D. Banks, University of Colorado, USA
• Peter D. Cameron, University of Dundee,
United Kingdom
• Christian Díaz Stark, TechnoServe, Peru
• Patricia Ochoa Delgado, TechnoServe,
Peru
• Joaquim Cortes, The Boston Consulting
Group, Peru
• Carlos Casas Tragodara, Universidad del
Pacífico, Peru
• Felipe Portocarrero Suárez, Universidad
del Pacífico, Peru
• Britt D. Banks, University of Colorado, USA
• Jose Luis Ochoa, World Vision International
Peru, Peru
Responsible Mineral Development Initiative 2011
37
Appendix
Further Contributors
D) Project Team
In reviewing references to case studies and initiatives
• Britt D. Banks, Adjunct Professor, School of Law, University of
Colorado, USA
• Jorge Bande, Codelco
• Vicky Bowman, Rio Tinto
• Peter Cameron, University of Dundee
• Susan Cook, Royal Bafokeng
• Nick Cotts, Newmont Corporation
• Caroline Crees, Harvard Kennedy School
• Cindy Croon, The World Bank Institute
• Marketa Evans, Foreign Affairs and International Trade Canada
• Anthony Hodge, International Council of Mining and Metals
• Michael Jarvis, The World Bank Institute
• Anders Tunold Kråkenes, Extractive Industries Transparency
Initiative
• Youcef Larbi, Cree Mineral Exploration Board
• Michael Lopez, Alcoa
• Robert Marquis, Direction générale de Géologie Québec
• Kathryn McPhail, International Council of Mining and Metals
• Alanna Rondi, Devonshire Initiative
• Fernando Ruiz-Mier, International Finance Corporation
• Jonathan Samuel, Anglo American
• Lalanath de Silva, The Access Initiative
• Michael Stanley, The World Bank Group
• Osvaldo Urzua, BHP Billiton
• Colin Webster, Goldcorp
• Ayoup Zaid Elrashdi, African Mining Vision
From our Advisory Partner: The Boston Consulting Group
• Knut Haanæs, Partner and Managing Director, The Boston
Consulting Group, Zurich
• Alexander Koch, Partner and Managing Director, The Boston
Consulting Group, Singapore
• Bjorn Matre, Partner and Managing Director, The Boston Consulting
Group, London
• Gustavo Nieponice, Partner and Managing Director, The Boston
Consulting Group, Buenos Aires
• Arvind Pandey, Partner and Managing Director, The Boston
Consulting Group, India
• Guillaume Ricome, Principal, The Boston Consulting Group, London
In addition the project team expresses its gratitude to the following
colleagues from the World Economic Forum for their support
throughout the project:
• Robert Greenhill, Managing Director, Chief Business Officer, Centre
for Business Engagement
• Jose Garcia, Community Manager, Mining & Metals
• Guido Battaglia, Community Manager, Mining & Metals
• Irina Dhowtalut, Senior Team Coordinator, Mining & Metals
38
Responsible Mineral Development Initiative 2011
• Jan Klawitter, Associate Director, Head of Mining & Metals Industry,
World Economic Forum, Switzerland
• Philip Krinks, Partner and Managing Director, The Boston Consulting
Group, United Kingdom
• Vaanchig Purevdorj, Project Manager, Mining & Metals Industry,
World Economic Forum, Switzerland
• Till Schmid, Project Manager, Mining & Metals Industry, World
Economic Forum, Switzerland (seconded from The Boston
Consulting Group)
• Alex Wong, Senior Director, Head, Centre for Business Engagement,
World Economic Forum, Switzerland
Appendix
E) Acronyms, Overview of Exhibits and Sources
List of Exhibits
List of Acronyms
2
Exhibit 1: The Responsible Mineral Development in 2 phases
3
Exhibit 2: RMDI Stakeholder engagement (Phases I and II)
5
AusAID
Australian Agency for International Development
BCG
The Boston Consulting Group
Exhibit 3: Overview of the RMDI framework formed out of six
building blocks
CSR
Corporate social responsibility
23 Exhibit 4 : Survey responses on view of overall helpfulness of
actions
DGF
Development grant facility
23 Exhibit 5: Survey results per action and stakeholder group
EI
Extractive industries
EITI
Extractive Industries Transparency Initiative
26 Exhibit 7: Use of Mineral Development Agreements (MDA) in major
mining economies
FDI
Foreign Direct Investment
28 Exhibit 8: Country segmentation
FICCI
Federation of Indian Chambers of Commerce and Industry
FUNJUS
Sustainable Juruti Fund
GDP
Gross Domestic Product
GNI
Gross National Income
HDI
Human Development Index
ICMM
International Council on Mining and Metals
IBOPE
Brazilian Institute of Public Opinion and Statistics
IFC
International Finance Corporation, World Bank Group
IMF
International Monetary Fund
LEITI
Liberian Extractive Industries Transparency Initiative
MDA
Mineral Development Agreement
NEPAD
New Partnership for Africa’s Development
NGGL
Newmont Ghana Gold Ltd
NGO
Non-governmental organization
PGMs
Platinum group metals
20 Case Study 11: World Bank Institute convening contract monitoring
coalition, Ghana
PWYP
PublishWhatYouPay
22 Case Study 12: Anglo American launching company-wide guidance
and tracking system
RBN
The Royal Bafokeng Nation
REC
Regional economic communities
RMD
Responsible mineral development
25 Exhibit 6: Stakeholder responses of perceived relevance of
suggested actions per country
29 Exhibit 9: List of country Tiers
29 Exhibit 10: Mining related FDI
30 Exhibit 11: Data and main sources used for country segmentation
List of Case Studies and Initiatives
9
Case Study 1: International Finance Corporation training schemes,
Peru
9
Case Study 2: Royal Bafokeng Nation training community leaders
9
Case Study 3: Codelco developing local suppliers, Chile
11 Case Study 4: Applying a socio-economic study toolkit in Lao PDR
11 Case Study 5: Newmont conducting economic impact study,
Ghana
13 Case Study 6: Establishing a national dialogue platform in Mongolia
15 Case Study 7: Alcoa setting up local development council, Juruti,
Brazil
15 Case Study 8: Cree Nation and GoldCorp signing cooperation
agreements, Quebec
18 Case Study 9: Liberia publishing mining agreements and payments
18 Case Study 10: Rio Tinto Group publishing tax and royalty
payments
22 Case Study 13: Government establishing office of the Extractive
sector CSR counsellor, Canada
7
Initiative 1: The World Bank Extractive Industries Source Book
8
Initiative 2: Africa Mining Vision
8
Initiative 3: Australian governmental development initiative
RMDI
Responsible Mineral Development Initiative,
World Economic Forum
RMI
Responsible Mining Initiative
13 Initiative 5: The Devonshire Initiative, forum for NGOs, mining
companies and government
WBG
World Bank Group
17 Initiative 6: EITI, a global transparency standard
11 Initiative 4: ICMM ‘toolkit’ for socio-economic impact assessment
17 Initiative 7: The Access Initiative, network of civil society
organisations
20 Initiative 8: World Bank Institute contract monitoring initiative
22 Initiative 9: Harvard Kennedy School CSR grievance mechanism
guidance
Responsible Mineral Development Initiative 2011
39
Appendix
List of Sources
Reports and other Sources
Databases and Organizations
• Alcoa – “Latin America Sustainability Report 2006/2007”
• The Access Initiative
• Africa Mining Vision
• African Union
• Alcoa Inc.
• Aura Minerals
• Anglo American
• Canadian International Institute for Extractive Industries and
Development
• Anglo America – Sustainable Development Report, 2010
• The Asia Foundation – Multistakeholder Forum on Responsible
Mining
• Cree Nation Government – Cree Nation Mining Policy, 2010
• FICCI/BCG – “Beyond License to Operate – Indian Mining: Solving
the Sustainability Conundrum”, jointly developed report on
sustainable mining by Federation of Indian Chambers of Commerce
and Industry (FICCI) and The Boston Consulting Group
• ICMM – Mining and Indigenous Peoples Issues Review
• Codelco
• ICMM – Partnerships for Development Toolkit
• Countries’ national statistics institutes
• IFC – Strategic Community Investment, Sustainable Business
Advisory
• The Devonshire Initiative
• Economist Intelligence Unit
• Extractive Industries Transparency Initiative (EITI)
• Goldcorp Inc.
• Government of Australia
• Government of Canada
• International Council on Mining and Metals (ICMM)
• Investment Trade Centre
• John F. Kennedy School of Government, Harvard University
• Liberia Extractive Industries Transparency Initiative (LEITI)
• Mongolian Responsible Mining Initiative
• Newmont Mining Corporation
• IFC – Addressing Grievances from Project-Affected Communities,
Good Practice Note, 2009
• Corporate Social Responsibility Initiative, John F. Kennedy School of
Government, Harvard University – Rights-compatible grievance
mechanism: a guidance tool for companies and their stakeholders,
2008
• Corporate Social Responsibility Initiative, John F. Kennedy School of
Government, Harvard University – “Piloting Principles for Effective
Company-Stakeholder Grievance Mechanisms: A Report of
Lessons Learned”
• Newmont Ghana Gold Limited (NGGL) – “The Socio-Economic
Impact of Newmont Ghana Gold Limited”, 2011
• Responsible Mining Initiative for Sustainable Development
• Revenue Watch Institute – “Contracts Confidential: Ending Secret
Deals in the Extractive Industries”, 2009
• Revenue Watch
• Rio Tinto Group – “Taxes Paid in 2010” report, 2011
• The Royal Bafokeng Nation
• Responsible Mineral Development Initiative – “Phase I Research
Report”, 2010
• Rio Tinto
• Raw Materials Group (RMG)
• UN Conference on Trade and Development (UNCTAD)
• United Nations Development Programme (UNDP)
• United States Geological Survey (USGS)
• World Bank
• The Royal Bafokeng Nation – “Building the Nation Stakeholder
Report”, 2011
• UN Conference on Trade and Development (UNCTAD) report
• World Bank Group – Annual Review of WBG Activities in the
Extractive Sector
• World Bank Institute
• World Bank Institute – East and Southern African Contract
Monitoring Program, 2011
• Worldwide Governance Indicator by the World Bank
• World Economic Forum – “Global Competitiveness Report”, 2011
• Further press/web research
40
Responsible Mineral Development Initiative 2011
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